Mortgage rates continue rising. If you're looking for a great deal on a mortgage loan or refinancing, don't wait much longer. The days of bargain basement mortgage rates appear to be waning as rates again increased for the week ending December 3.
HSH Associates reports that average combined rates for a 30 year fixed rate mortgage (FRM) loan moved up by 8 basis points from 4.78 to 4.86 percent. Likewise, rates for a 15 year FRM ticked upward to 4.26 from 4.19 percent. 5/1 adjustable rate mortgage (ARM) loans continue to provide lower rates than FRM loans, but their average combined rate increased from 3.63 to 3.66 percent. If you're ready to buy or refinance, it's time for moving forward.
Low mortgage rates and low home prices provide extra borrowing and buying power
Shopping mortgage rates and loans by requesting mortgage quotes can help you find the best mortgage. Before contacting mortgage lenders, take these steps:
- Know your credit scores: Request copies of your credit reports and obtain your credit scores; review your credit reports for errors and make note of your credit scores. FICO scores of 740 or more are typically required for qualifying for the lowest mortgage rates, provided you're otherwise eligible for a conventional mortgage loan.
- Plan for your down payment and closing costs: Conventional mortgage loans usually require a minimum of 20 percent down or no more than 80 percent loan to value (LTV). This means that you should be prepared to make a down payment of 20 percent of the purchase price or your home's current value. In addition, plan on paying 2 to 5 percent in closing costs.
- Consider FHA mortgage loan programs: FHA offers cash and or credit challenged buyers the opportunity to qualify for mortgage loans with minimum down payments of 3.5 to 10 percent. FHA is a popular choice among first time buyers and refinancing homeowners whose homes have decreased in value.
Taking advantage of today's low mortgage rates and low home prices can provide additional affordability and buying power. Our live database of current mortgage rates can help you find the best mortgage rates in your area.