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Finding the Best Current Mortgage Rates

By Nathaniel Hutchinson Business and Financial Expert


According to Freddie Mac, homebuyers shouldn't have to look too hard to find the best current mortgage rates, though few seem willing or able to take advantage. In its Primary Mortgage Market Survey, the federally-run mortgage company estimated current rates at their lowest levels since October 2011, when they hit a record low of 3.94 percent.

Despite the affordable rates, many homes remain vacant, thanks partly to tough lending requirements that make it hard to get a loan. On the other hand, opportunities abound for those in a strong position to buy. According to Frank Nothaft, Freddie Mac's chief economist, 30-year fixed-rate mortgages averaged 4.00 percent across the country last week, while 15-year fixed-rate mortgages averaged 3.31 percent.

Does this mean I'll get a good rate?

The Primary Mortgage Market Survey provides a good estimate of national trends; however, to find the best current mortgage rate, you must shop around. To compile its list, Freddie Mac conducts phone interviews to gather good faith estimates from lenders throughout the nation. This helps take the temperature of the real estate market and gives those who work in the industry a good idea of what is going on. What the survey doesnít do is tell what lenders are doing in your specific area.

When assessing loan rates, banks consider certain factors regarding the home, the local community and the borrower. For example, if you are planning to purchase a home in a county that's endured a high rate of foreclosures, your lender will view the investment as riskier, and you will be forced to pay a higher rate. Basically, anything that appears to increase risk on the lenderís part will ultimately drive your mortgage rate higher. If you have a poor credit rating, you will probably pay a higher rate, because the bank will consider you to be a relatively risky partner compared to someone who has demonstrated a strong history of fiscal responsibility.

How to find the best current mortgage rates

Although lenders typically use the same basic formula to determine rates, in-house policies and flat out greed can work to influence each institutionís final decision. To get the best possible deal, get a good faith estimate from one lender and then take that figure to at least two to three others. More often than not, the lender will agree to beat the rate quote provided by a competing financial institution.

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