Mortgage rates remain the same for the week of September 1, 2014

Posted by  on Sep 08, 2014

It's been another quiet week for mortgage rates, with only the tiniest variations in the most important types. The most important of all, the 30-year fixed-rate mortgage (FRM), inched down to 4.16 percent from 4.17 percent. Points for these rose by a similarly small amount: to 0.15 from 0.14, according to HSH.com.

The average for 15-year FRMs stayed the same at 3.45 percent with points edging down to 0.11 from 0.12. Some adjustable-rate mortgages (ARMs) moved more -- but only slightly so. The 30-year 1/1 ARM ended up at 2.67 percent, up from 2.65 percent the previous week, with points also rising to 0.19 from 0.16.

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

Mortgage rates not the only factor for many

The last time the average rate for 30-year FRMs was lower was in June 2013, and many planning to move or refinance are likely to be cheered that they still have access to historically low home loan deals. Others, however, are probably gritting their teeth rather than grinning. They're the ones trapped by underwater loans, meaning the market value of their homes is lower than the amount they still owe on their mortgages.

Last week saw publication of the latest CoreLogic Home Price Index report, and it contained good and bad news. The good news was that, as a national average, home prices in July were up 7.4 percent year on year. The bad was that they remain 11.9 percent below their peak, reached in April 2006. Of course, those numbers mask huge regional and local variations. In Nevada, for example, the worst performing state, they remained in July an eye-watering 36.4 percent below their peak.

While millions of Americans are still trapped in underwater loans, millions of others have seen theirs break the surface in recent years. And rising prices surely mean thousands more are finding themselves with positive equity every week.

Home refinance after being underwater

ShopRate.com recently gave advice to those whose homes are on the cusp of positive equity:

  1. Don't forget to check your mortgage's amortization schedule. The amount you owe should normally be dropping, though how quickly is likely to depend on how far into your home loan you are.
  2. You're almost certainly going to need an "equity cushion" before a lender is interested in offering you a home refinance deal. In other words, your home may need to be worth about 20 percent more than your current mortgage debt.
  3. Don't rely just on online sources when you monitor your home's value. Back that up with your own research of actual sales prices in your neighborhood. If you're lucky, your street might be outperforming your city or state.

There's a fourth point for those in Nevada and elsewhere where the home-price recovery is painfully slow: Try to stay positive. Generally speaking, U.S. economic news is very encouraging (Comerica Bank economists are calling last week's worse-than-expected payroll data an "aberration"), and it seems more than likely that you too are going to wake up one morning in a bedroom that's part of a real and appreciating asset.

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