Mortgage Rates Drop to 30-Year Low
As the coronaviorus pandemic continues, mortgage rates dropped to the lowest level ever in the Mortgage Bankers Association’s 30-year-old weekly survey. This has caused a rush to refinance. Total mortgage application volume rose 7.3% week over week.
CNBC says that average interest rate for 30-year fixed-rate mortgages with loan balances of $510,400 or less decreased to 3.45%. That’s the lowest since 1990. It was at 3.49% the previous week.
These attractive rates have caused a 10% weekly surge in applications to refinance a home loan. Refinance volume was also 192% higher than a year ago. On the other hand, new mortgage applications were down 2% from a week earlier 35% down compared to one year ago.
Lenders are also making it harder for new mortgage applicants to get approved. Chase for example now requires a minimum FICO credit score of 700 plus at least a 20% down payment.
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How to know if worth it. If currently at 4 75 then if go to 3.45 and have to do another downpayment as well. Where’s the value in doing this
You don’t have another down payment. The loan is being paid for by your new lender. While there’s fees to refinance you can also request a no cost refi wherein all fees are covered by the lender.
I refinanced over a quarter point. All fees were covered. These days 90%+ of the process is done online and can be handled while you sip your coffee. Point being, not as much work as it may seem. The difference in savings however can be huge. This isn’t a decision between store vs name brand can of corn.
Thank you. Refinancing over a quarter point made a difference…Wow
Based on 4% opportunity cost (what to do with monthly savings) of extending 22 years back to 30 (3.5 to 3.25) it still saves me about $10k. If you reduced the 4% opportunity cost it would save even more.
In my case my main goal was to reduce monthly outflow of ~$300 which could then be diverted to investments / opportunity fund. Mind you I didn’t cash out nor do I have any HELOC. I personally would never do that with my home. Either way, it saved money and gives me the power to decide where that extra $300/mo goes. Maybe I opt to pay down the mortgage and consider it my pseudo bond allocation. Who knows. I like options though.
Nice. I like options too. Thank you
Perfect! I’m in the middle of a refi now. Also I could mention I’m getting a 2,500$ AMEX rebate through Rocketmirtgage/Quicken. That is credit card related !!!
Nice! I almost did this with Better Mortgage but I didn’t like their games. They had a similar/same offer. In the end it was only the difference of maybe $1k, which still counts of course, but I wanted to get my refi completed before the world shut down in March. Barely did too. I’ll be keeping an eye on them though in the future if/when I do another refi.
I’d be interested to know how the process goes as far as getting paid by Amex. Is it a statement credit? Did they provide you an explicit timeline for when it will post? From the little I did read about the Better Mortgage offer, it was a specific amex link that needed to be clicked through so it was a bit different than your standard amex offer.
Been traveling much lately? Keeping a pulse on changes in various markets impacting many people is fine by me. Especially if it’s in an attempt to optimize.
This was supposed to be @ Gene
Been traveling much lately? Keeping a pulse on changes in various markets impacting many people is fine by me. Especially if it’s in an attempt to optimize.
EDIT: @ Tim because my button coming
clicking sucks
Is this still a travel blog?
This has always been a miles, points, deals, travel, finance and news website. There isn’t a ton going on in the first half of those options right now and to be honest people don’t seem to be interested in reading about it right now. So we have been focusing more on the deals, news and finance aspect as of late until travel starts back up.
Thanks Mark. I follow your posts and realize that most people aren’t blogging about travel right now. I haven’t looked at the rates in a couple years since I don’t have a mortgage any more but this is really interesting. My first mortgage was at 9.5% in the 90s. Under 3.5% is amazing. I also agree with the other poster that it doesn’t seem wise to borrow money against your house to invest in the market.
Read my reply to Gene. I understand this isn’t a personal finance blog, but I also assume it’s a prerequisite to applying for credit cards. Or should be at least.