Most home loan apps this year are not for new home purchases. The housing market remains sluggish despite these record low interest rates.
If you pay discount points upfront, you can get even lower rates. This only makes sense if you plan to stay in your home for years, for more than five years.
Low-interest mortgages are only options for people with at least 20% equity in their homes or the cash on hand for a down payment of at least 20% and have credit scores above 720 and verifiable income.
Mortgage rates tumbled to the lowest level in the history of Freddie Mac’s weekly survey, with 30-year fixed-rate home loans being offered this week at an average 4.15%, down from last week’s 4.32%.
Freddie Mac said in its weekly report that loans with variable interest rates also hit record lows, as did shorter-term fixed-rate loans. The 15-year fixed-rate loan, a popular choice with people refinancing their homes, was being offered at an average rate of 3.36%, down from 3.50% last week, Freddie Mac said.
The survey includes loans made with minimal payments of fees and points to lenders. The borrowers getting 30-year loans this week would have paid 0.7% of the loan amount in upfront fees and discount points, and borrowers would have paid 0.6% of the loan amount for the 15-year fixed loans, Freddie Mac said.