Average Mortgage Rates Set by Lenders

If you have been following the lending market you will have noticed that the average mortgage rates have dropped a fraction of a percent over a short period. Now is the perfect time to take out a mortgage to buy your dream house, or to refinance and pay off the loan you are now paying. Just recently the average mortgage rates for a 30 year mortgage dropped from 6.13 percent interest rate to 5.87 percent, and a 15 year mortgage dropped from 5.60 percent to 5.27 percent. An adjustable rates mortgage has increased, while the fixed rate mortgages has decreased slightly.

Before you secure a mortgage or refinance the mortgage you have borrowers should know the average mortgage rates. You can go online to several different lending companies’ websites and find the average mortgage rates from weekly to monthly periods. You may notice that different lending companies advertise different interest rates, and you might also see that the 30, 20, and 15 year fixed rate loans have fairly high APR’s, which are fees that are added onto the yearly interest. Shopping around for the best interest rate is your best option.

The average mortgage rates fluctuate from week to week, so if you are applying for a mortgage loan you should know you have an option to lock-in your interest rate or float it. If you lock in your interest rate and the rate drops before your closing you are obligated to the locked-in rate you signed up for, but if you float your interest rate, that means you can lock it in any time before closing. Borrowers often float their interest rate because there could be a chance that the interest rate could drop before they close the deal.

When applying for a mortgage, ask questions if there is anything you don’t understand about the process. It is a good idea to write your questions down before going to see the lender, so that you don’t forget to ask. It is better to ask than to get locked into a contract that isn’t just what you want. Besides considering the average mortgage rates, you should consider how many points you would like to pay at closing. Each point represents 1 percent of your loan. The more points you pay for the better the interest rate you will receive from your lender.

Another way to possibly get a deal below the average mortgage rate is to have a sizable down payment. It’s a good idea to start saving long before you are ready to buy a home and take out a mortgage. Saving 2 percent or more of the amount of money you will need to borrow will help to bring down the interest rate. Many people who work have money taken out of their paychecks automatically and deposited into savings. Another way to come up with a down payment is to borrow from a 401k. There are so many ways to get a loan with an interest rate under the average mortgage rates. Taking the time to save and research can save you a significant amount of money over the term of your mortgage loan.