Mortgage rates fall for the week of June 30, 2014

Posted by  on Jul 07, 2014

If mortgage rates were following the "science" of economics' equivalent of the law of gravity, they should have risen last week. Economic news was generally positive -- especially those great employment numbers -- which usually means rates go up. Instead, they generally went down. In fact, for the most popular types of home loans, they hit their lowest levels for more than a year. Science, schmience.

Refinancing rules

These year-low rates are, as you'd expect, tempting more homeowners to refinance. In fact, refinances increased their share of the market, and made up 53 percent of all mortgage applications during the week ending June 27, according to a Mortgage Bankers Association report published Wednesday.

In recent months and years, millions of homeowners have seen their home loans break the surface after long periods when they were underwater (or in "negative equity"). Both those terms mean the same thing -- the market value of the home was lower than the balance outstanding on the mortgage.

Your refinance choices

Having negative equity made it difficult (though not always impossible -- see the federal government's still-current FHA Short Refinance program) for many to take advantage of the lowest mortgage rates of all time, seen a while back. So today's ultra-low refinance rates are the first opportunity millions have had to get a great deal for many years.

If your home's value has bounced back enough, you may qualify for a mortgage that's not backed by the Federal Housing Administration (FHA). That should be a more affordable option because you shouldn't normally have to pay the sorts of high mortgage insurance premiums (MIPs) invariably levied by the FHA. But if your positive equity is more limited, you may just have to swallow those MIPs. (Although, if you have sufficient savings, you could also consider a cash-in refinance or a level of mortgage prepayment. Use our "Should I refinance?" and other mortgage calculators to model your options.)

This week's mortgage rates in detail

Here are, according to HSH.com, the average rates nationally during week ending July 4 for a selection of home loans:

  • 30-year fixed-rate mortgage (FRM): 4.18 percent, down 5 basis points from 4.22 percent the previous week. Points rose to 0.14 from 0.12 over that period.
  • 15-year FRM: 3.41 percent, down from 3.45 percent. Points also fell to 0.08 from 0.09.
  • 30-year 1/1 adjustable rate mortgage (ARM): Up to 2.87 percent from 2.75 percent. Points also rose to 0.11 from 0.10.

Our live database of current mortgage rates can help you find the best mortgage rates in your area.

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