Mortgage Rates Hit Another Record Low and How You Can Take Advantage

Over the course of the pandemic, 30 year fixed mortgages have made and broken the record for the lowest average rate ever eight different times. This is according to the data Freddie Mac has been compiling for almost five decades.

This week, the average rate fell to 2.88%, which is down from 2.99% the previous week. For 15 year fixed mortgages, the average is the lowest it’s been since they began collecting that data almost three decades ago. It clocks in at 2.44% compared to last week’s average of 2.51%.

One thing to keep in mind here is that these percentages are averages, so of course, you won’t automatically be offered a 2.88% interest rate on a 30 year fixed mortgage. You could be offered a higher rate than that, or you might be excited to find that you’ve been offered something even lower.

Here are some tips and things to consider so you can ensure you end up with the lowest rate possible:

Work With a Mortgage Professional

The most important tip is to work with a mortgage professional. Even though mortgage rates across all lenders are lower if you want a rate like 2.88% or less, you’re still going to have to shop around for it. In fact, who you choose as your lender could impact your rate by three-quarters of a percentage point.

By yourself, you’ll have to cast a wide net to find the fish you’re looking for, which takes up your time and effort. A pro will have the insider info and can point you in the direction of lenders that they know are offering the lowest rates among their competitors.

Your Credit Score Still Matters

Last week, Housing Wire published a story stating the United Wholesale Mortgage (UWM) was offering rates as low as 1.875% for 15 year fixed mortgages. That’s obviously the very low end of the average mortgage rate spectrum. However, they’re not just handing those rates out to anyone who’s approved for a loan. To qualify for that kind of rate at UWM, you have to have a FICO score of at least 640.

If you had planned on getting your credit score up before you applied for a mortgage, you might still need to do that. But, this is another reason why you should work with a mortgage professional; they can look at your score and tell you if you really do need to spend some time improving it or you might be pleasantly surprised to find out that it’s actually in good enough shape to apply right now.

Down Payments and Paying Points

Something that was true before these historically low rates and is still true now is that higher down payments and “paying points” will get you a lower rate.

When you can provide a bigger down payment, you’re proving to lenders that you’re a trustworthy borrower, and in turn, you could be rewarded with a lower interest rate. With a standard 20% down payment, you can still get a low rate, but if you want to see how low you can go, you might consider adding to your down payment pot.

You can also pay for discount points. This entails paying a chunk of money upfront to your lender to secure a lower rate.  One thing to keep in mind is that this isn’t always the right move for every borrower. Again, working with a mortgage professional means that they can look at your specific situation and decide if this is worth doing.

Whether you want to buy a home or refinance, you need a pro to help. If you want to not only take advantage of these mortgage rates but also get the absolute lowest rate possible, email us or gives us a call at (323) 412-9060.

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