Average mortgage rates for fixed rate mortgages fell slightly this week, while the rate for 5/1 ARMs ticked upward to 4.83%, one basis point more than last week's average rate of 4.82%. On average, borrowers can expect to pay approximately .70 point for these rates. Points and lender fees may be higher for borrowers with credit issues.
Home buyers and homeowners wishing to refinance continue to enjoy added buying and borrowing power; if you're considering purchasing a home or or a mortgage refinance, you can still gain the advantage of favorable interest rates and lower home prices in many areas.
First time buyers may wonder about paying "points." A point is one percent of your mortgage loan amount. Points are paid at closing either with cash from borrowers or by increasing the mortgage loan amount. Lenders often charge "discount" points for more favorable rates, for locking in a specific rate, or for supplying credit challenged borrowers with a lower rate. As an example, if you borrow $200,000 at two discount points, you'll pay $4000 in mortgage interest "up front". Although coming up with cash for paying discount points can be a challenge, it may be worthwhile if you plan to keep the home you're financing for several years. If you have to increase your mortgage amount to cover discount points, potential savings over your mortgage repayment term can be reduced or lost. Origination points are lender fees expressed as a percentage (see above) of your mortgage loan. When getting mortgage quotes, make sure to verify what type of points are being charged.
Shop rate and mortgage loan options through several lenders to find your best deal. You can compare mortgage quotes and negotiate terms among lenders. Getting your best deal can take time, research, and a little elbow grease, but getting the mortgage loan you need at today's low rates may save money for years to come.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.