How low is low? We're not sure, but mortgage rates fell again last week. HSH Associates reports that average combined rates for a 30-year fixed-rate mortgage (FRM) dropped by five basis points to 5.18 percent, while corresponding rates for a 15-year FRM shed six basis points to 4.50 percent.
Those seeking a rock-bottom mortgage rate for a few years can benefit from a 5/1 adjustable-rate mortgage, with average combined rates settling at 3.87 percent, four basis points less than last week.
How long these bargain basement rates will last is any one's guess, but they can provide opportunities for those who haven't considered buying or refinancing a home. Here's why.
Mortgage rates: Low rates provide opportunities
Although most mortgage refinance loans are made for lowering mortgage rates, lower rates can provide additional borrowing power for cleaning up credit card debt or making home improvements. It's important to consult a financial advisor for going over your finances since the benefits of refinancing can vary according to factors including how much your home is currently worth, costs of taking out a new mortgage loan, and the amount and annual percentage rates for debts you want to consolidate.
Purchasing a second home
Whether you want a vacation home or a condo for your college bound kids, low home prices and mortgage rates are making a second home purchase feasible for more families. Rates for second or rental properties can vary, but current low mortgage rates are good incentive for checking out possibilities.
Home remodeling or rehab
Whether you're buying a "fixer" for your first home, or remodeling your existing home, FHA offers a home rehabilitation loan that provides funds for purchasing or paying off an existing mortgage while providing additional funds for rehab costs. This type of financing can be useful for those purchasing foreclosed properties, which are typically sold in "as-is" condition.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.