Mortgage Rates Have Not Finished Falling Yet

Mortgage rates are continuing to drop, but few borrowers qualify for the historical lows.

Keeping up with the current mortgage rates is almost like riding a rollercoaster lately. For the longest time, the rates were holding fairly steady a few months ago. Then they started to decline. In fact, they declined for several weeks in a row. A couple weeks ago, they went back up slightly and now the current mortgage rates have dropped again to another historic low.

According to figures by Freddie Mac, the rates for a 30-year fixed-rate mortgage have fallen to a record low for the 12th time in only 16 weeks. Analysts attribute the rate drops to the uncertainty in the market. People aren’t spending like they used to and instead they are putting their money away. That means fewer borrowers on the housing market. Inflation is also playing a major role in the lowest mortgage rates in decades.

Here is a breakdown of the current mortgage rates you can expect if you qualify for the best rates available:

A 30-year fixed rate mortgage has dropped to 4.27 percent with 0.8 percent of the borrowed amount paid directly to the lender at the beginning of the loan. Freddie Mac has been tracking rates for nearly four decades and this is the lowest the rates have been in all those years. It also marks the 12th time the rates have hit a record low since the last couple weeks of June.

Mortgage rates for a 15-year fixed rate mortgage are even lower than that. That rate currently stands at 3.72 percent with 0.7 of a point paid to the lender up front. These numbers for the 15-year fixed rate loan have not been this low in nearly 20 years. It’s about a half of a percentage point lower than it was a year ago at this time when the rate stood at 4.33 percent.

Rates for a five-year ARM are currently at 3.74 percent which represents the lowest it has been in five years. One-year mortgage ARMs are sitting at 3.40 percent. Rates have only been that low one other time since 1984 and that was only three weeks ago.

As low as these rates are, some analysts are expecting mortgage rates to drop even lower than they are now. According to Richard C. Temme of the California Association of Realtors, believes Fannie Mae and Freddie Mac may offer mortgage rates as low as 3.75 percent in the next few months because the Fed is running out of options. Unfortunately, he says, lenders are too scared to take any more chances with borrowers who have bad credit because of what has happened in the last few years. Hopefully something will work out soon to get the housing market jump started once again where people are confident about buying.

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