In an effort to soften the economic blows caused by COVID-19, the Federal Reserve began buying bonds backed by home loans in March, causing current mortgage rates to fall below 3% for the 13th consecutive week. As of this writing, 30-year mortgage rates have reached a record-breaking rate of 2.8%, while 15-year mortgage rates dropped to 2.33%.
When asked about this record-breaking rate drop, Freddie Mac’s chief economist Sam Khater stated: “Mortgage rates remain very low, providing homeowners who have not already taken advantage of this environment ample opportunity to do so.”
However, these impressive rates come with a stipulation for most borrowers refinancing with conventional loans.
What This Means For Home Buyers
These consistent drops have not only made mortgage loans more affordable but created a rare opportunity for some borrowers who may not have otherwise been able to take advantage of 15 or 20-year mortgage rates to buy a home with a shorter loan life. If you’ve been on the fence about buying a home, the recent drops in mortgage rates are low-hanging fruit ripe for the picking.
Since there is no real way of knowing how long rates will stay at historic lows, prospective buyers who want the lowest interest rates possible on their next home loan should seriously consider finding an easy mortgage company that can assist with mortgage pre-approvals and rate locks. If you have mortgage questions to ask a loan officer, now is the time to do so.
What This Means For Refinancing
In August 2020, the FHFA instituted a 0.5% adverse market fee on most refinanced conventional loans with an effective date of December 1. Excused from the unfavorable market fee are conventional loan amounts less than $125,000 and HomeReady or Home Possible loans.
Rather than charge this as a fee to the borrower, lenders will increase current refinance rates by an average of .0125% to 0.25% (a free mortgage calculator can help visualize what difference this rate increase will play in your newly refinanced home loan). To avoid the adverse market fee, your refinanced loan must be closed and in the hands of Fannie Mae and Freddie Mac before December 1.
Though the adverse market fee means less overall savings, borrowers still benefit significantly from refinancing at current refinance rates; but why not try to beat the adverse market fee to the December 1 finish line? With a little help from Wyndham Capital, you just might be able to.
How Wyndham Capital Can Help
Wyndham Capital is the online mortgage lender with the digital tools and efficient home lending process to work quickly and efficiently to get you into a home loan at an interest rate you may never again see in your lifetime. From mortgage pre-approvals and rate locks to digital home loan closings, Wyndham Capital is the smart choice to service your loan from wherever you are. With us, you’ll get a home loan process 60 percent faster than the industry average. Contact one of our expert loan officers today and be on your way to a better home loan before the street lights come on.