The last few weeks it’s felt like mortgage rates were on a roller coaster at a summer carnival (before social distancing, of course).
They went up for a few weeks after lenders were blindsided by a new fee on refinance loans, but now rates are potentially closing in on new all-time lows, a weekly survey shows.
today’s deeply cheap mortgage rates, which can save them hundreds of dollars a month when they refinance.” data-reactid=”34″Lenders had jacked up their mortgage rates in response to the new surcharge, but the fee was just delayed — and rates have been pulled back. Homeowners have been given more time to take advantage of today’s deeply cheap mortgage rates, which can save them hundreds of dollars a month when they refinance.
Fee reversal puts mortgage rates near record territory
Mortgage rates have dropped to an average 2.91% for a 30-year fixed-rate loan, down from 2.99% last week, according to mortgage company Freddie Mac. A year ago, the typical rate was 3.58%. The loans in the Freddie Mac survey come with an average 0.8 point.
Thirty-year fixed-rate mortgages hit an average of just 2.88% on Aug. 6.” data-reactid=”61″Rates are now just a couple of notches above their all-time low from early this month in the Freddie Mac survey, which has been tracking mortgage rates for nearly half a century. Thirty-year fixed-rate mortgages hit an average of just 2.88% on Aug. 6.
But it was less than a week later that mortgage rates jumped after surprising news from Freddie Mac and Fannie Mae, which are government-sponsored mortgage giants that buy or back most U.S. mortgages. The companies announced that on Sept. 1, they’d start charging a new 0.5% fee on refinance loans.
They said they needed the additional revenue because they expect to lose billions of dollars due to the coronavirus recession.
Lenders reacted to the announcement by boosting their rates to begin offsetting the surcharge, which the Mortgage Bankers Association said would cost the average borrower an extra $1,400.
After protests from the mortgage bankers and others, the federal agency that regulates Fannie and Freddie said this week that it would put the fee on hold until Dec. 1.
And mortgage rates have come back down.
Ultra-low mortgage rates may not last long
Rates are again at a level where roughly 18 million homeowners could save an average $287 a month by refinancing, according to data from the mortgage research firm Black Knight.
homebuyers, who are now making up for time lost last spring when COVID-19 lockdowns were widespread.” data-reactid=”89″The decline in mortgage rates also is benefiting homebuyers, who are now making up for time lost last spring when COVID-19 lockdowns were widespread.
“Driven by low rates, low inventory, a recovering economy and a fundamental desire to live in a house and neighborhood that suits the new reality of primarily working from home, buyers are active,” says Corey Burr, senior vice president at TTR Sotheby’s International Realty in Chevy Chase, Maryland.
save big through a refinance, you may need to move quickly — before that refi fee starts having an impact on mortgage rates again.” data-reactid=”95″But if you’re thinking of buying a home, or if you’re a homeowner who could save big through a refinance, you may need to move quickly — before that refi fee starts having an impact on mortgage rates again.
Though it’s been delayed until December, experts say the fee could begin driving rates higher as early as October, when lenders begin preparing for the implementation.
Get mortgage offers from at least five lenders and compare them, to find the lowest rate that’s available to you based on your location and your credit profile.” data-reactid=”97″So, start shopping around for a bargain loan now. Get mortgage offers from at least five lenders and compare them, to find the lowest rate that’s available to you based on your location and your credit profile.
seek rate quotes from several insurance companies to be confident you’re paying the best price for your coverage.” data-reactid=”98″Be sure to take a similar approach with your homeowners insurance. When it’s time to buy or renew your policy, go online and seek rate quotes from several insurance companies to be confident you’re paying the best price for your coverage.
What other mortgage rates are doing
The latest Freddie Mac survey shows rates on other popular types of mortgages are mixed this week.
for refinance loans, and the rates are down considerably from last yeat at this time, when the average was 3.06%.” data-reactid=”121″The average…
Read More: Mortgage rates tumble toward new lows as refinance fee is delayed