Mortgage Rates Forecast For August 2016
Eight months into 2016, and mortgage rates are making a monkey out of Wall Street predictions. According to Freddie Mac’s weekly mortgage rate survey, 30-year mortgage rates are holding low, closing last month at 3.48%, on average, nationwide. 30-year mortgage rates are down more than 50 basis points (0.50%) since the start of the year, and 15-year mortgage rates are down by a related amount. You could possibly benefit from a refinance if you purchased a home within the last year, or if your mortgage is more than a few years old. More than 7 million U.S. homeowners are potentially eligible to refinance, and if you’re in the market to buy a home, it’s a good time to be looking. Due to the way mortgage rates have dropped, if you could afford a $400,000 home in December, today, you can afford a home for $427,000 — an increase of 7% to your purchasing power. It’s a good time to take a look at today’s low rates.
30-Year Mortgage Rates Average 3.48%
The average conventional 30-year fixed rate mortgage is 3.48%, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS). The Freddie Mac rate is available to “prime” borrowers paying an accompanying 0.5 discount points at closing. Discount points are a one-time loan cost, where one discount point carries a cost equal to one percent of your first mortgage loan size amount. For example, 1 discount point on a Miami, Florida loan at the mortgage loan limit of $417,000 would carry a cost of $4,170 to be paid at closing. Discount points, which are typically tax-deductible, can be paid with cash or they can be added to your loan size for you. Note, though, that Freddie Mac’s weekly mortgage interest rate survey applies to conforming loans and conventional mortgage rates only. FHA mortgage rates and VA mortgage rates are not surveyed as part of the report; nor are mortgage rates for USDA loans. Rates for these other loan types are even lower. All of this makes it easier for today’s refinancing homeowners to qualify for streamlined loans such as the FHA Streamline Refinance, the VA Streamline Refinance, and the USDA Streamline Refinance. Streamlined refinance loans can close in as few as 30 days because of reduced paperwork requirements and appraisal waivers. Streamlined refinances are simpler for banks to underwrite and approve.
Mortgage Rates For August 2016
Today’s mortgage rates are well-entrenched in the 3s — and some borrowers report getting rates in the twos. Loans now cost just $448 monthly for every $100,000 borrowed, excluding escrows for taxes and insurance; and, private mortgage insurance (PMI), where applicable. It should be noted that although mortgage rates are low today, they may not stay low for long. Mortgage rates change quickly with the economy, and with shifts in market sentiment. In August, mortgage rates could shift upwards towards the fours; or, shoppers may find rates retreating even lower than they have.
Your luck with the month’s mortgage rates will be part-economy, part-psychology, and part good fortune.