Mortgage Rates Dip to Lowest Ever!

The Associated Press released an article I found in the Columbian yesterday indicating that America's major mortgage indices had bottomed out to the lowest levels in history. 30 year fixed rates in the very low 3s and even some high 2s are available to highly qualified borrowers. This is a great time for even those with weaker credit profiles to jump in, as rates across the board should be lower. Rates that were reserved for the 750+ FICO crowd a few months ago are now garden variety rates available to average credit score individuals.

A rate change from 4% yields a principle and interest payment on a $300,000 mortgage of $1,432 versus a 3% payment on the same mortgage of $1,265 a $167 per month savings and a savings of more than $60,000 over the life of the loan! Another way to look at these low rates is the buying power. A borrower limited to a principle and interest payment of $1,432 per month can borrow $300,000 at 4% but at 3% they can borrow $339,750! Nearly $40,000 MORE house for the same payment! 

Buyers be aware that rates vary around the country and a borrowers credit and financial profile can lead to a wide range of rates spanning at least a 1/2 percent for a borrower with an average to below average score and other loan related financials. Where a "golden" borrower might get a rate at 2.875% someone with a more typical 680 score and tighter monthly budget might be at 3.375%. Always check with your trusted loan professional before making any decisions but remember even if you can't get the LOWEST rate out there the rate you CAN get now will be the best it could possibly be since rates are lower than ever before, right now!  

Buyers that have recently felt priced out of the market, may have just been priced back in. Mortgage raters can be fickle and that means buyer on the pricing bubble need to act quickly. Even a 1/4 point rate bump might price some buyers out again.