What Are Current Mortgage Rates; and Do They Matter?


According to Freddie Mac, current mortgage rates are at record lows; however, that doesn’t necessarily mean you will end up with an affordable home loan. Before you contact a lender, get the facts from our in-house financial expert, who warns that national averages often have little effect on what borrowers should expect in their particular areas.

Amazingly Low Rates

In its most recent survey, Freddie Mac reported the national average of current 30-year mortgage rates at 3.79, with 15-year loans averaging 3.04 percent. The low averages make now a great time to secure an affordable loan as long as you live in the right area, according to financial expert, Nathaniel Hutchinson.

“In many parts of the country, home loans have never been more affordable,” he said. “If you have good credit, stable employment and enough money to put toward a hefty down payment; you have a great chance to secure a very inexpensive loan.”

Not Everyone Will Get Low Rates

Although Freddie Mac reports that current mortgage rates continue to linger well below 4 percent, Hutchinson says not all borrowers will get a great deal.

“To reach its figures, Freddie Mac surveys only a handful of lenders in different parts of the country,” he said. “Basically, these lenders provide what are called good faith estimates. Usually these estimates are pretty accurate; however, just because rates are low in one area doesn’t mean they will be low elsewhere.”

Hutchinson says lenders base their rates on perceived risk, which can vary from state to state and town to town.

“If you are applying for a loan in an area that has experienced significant unemployment and/or foreclosures, your rates are liable to be higher,” he said. Likewise, if you have dings to your credit or have any other personal financial issues that might make a lender nervous, the institution will assess a higher rate to protect itself against a potential default.”

What Borrowers Should Do

According to Hutchinson, borrowers should always compare offers before settling on any one particular mortgage lender.

“You might think that all banks assess risk using similar formulas; and for the most part, this is true,” he said. “That said, many have differing policies that can result in higher rates, fees and other expenses. To get the best deal, borrowers should always speak to multiple lenders.”

By Ryan Lawrence (20 Posts)

Ryan Lawrence is a professional web copywriter and KingofHowto.com expert.

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