Summary: Where do mortgage interest rates stand today, and where are they expected to be throughout the remainder of 2020? This article will clarify the state of mortgage rates to help you determine if now is a good time to buy.
Mortgage rates for 30-year fixed rate mortgages continue to stay near historic lows as the year gets underway. And with news of the coronavirus spreading, rates have fallen even further and may even be expected to stay lower than initially anticipated throughout the year.
According to Freddie Mac’s weekly mortgage rate survey of more than 125 banks nationwide, the average 30-year fixed rate mortgage rate is now 3.36% as of the second week of March 2020.
The rate is available to conforming, prime borrowers willing to pay an accompanying 0.7 discount points plus a full set of closing costs. A “prime” mortgage applicant typically has excellent credit, verifiable income, and at least 25% equity in their home.
And, it’s not just the 30-year fixed rate mortgage that continue to stay low, either. The 15-year fixed rate mortgage did, too, now sitting at 2.77%. The 15-year fixed rate mortgage also requires 0.7 discount points plus closing costs. And the 5/1 ARM rate is currently 3.01%.
Discount points are a one-time, up-front closing cost, based on loan size. If your loan requires 1 discount point, that means that your loan has a closing cost equal to 1 percent of your loan size. If your loan requires two discount points, the fee would be equal to two percent of your loan size; and so on.
So, based on this week’s Freddie Mac survey, a home buyer in Bellevue opening a $200,000 mortgage and paying 0.7 discount points would face a one-time $1,400 fee to be paid at closing.
The good news is that discount points are optional.
To avoid paying discount points, simply ask your lender for a “zero points” loan. You’ll get a higher mortgage rate than what Freddie Mac shows in its survey, but you’ll pay fewer closing costs.
Today’s low rates are terrific for both home buyers and existing homeowners looking to make a refinance. As compared to last year at this time, mortgage rates are down by 95 basis points — nearly one full percentage point.
Where Are Mortgage Rates Going To Be Throughout 2020?
According to Freddie Mac, the annual mortgage rate average for 30-year fixed-rate mortgages is expected to be 3.7% in 2020. But that may change as the coronavirus continues to wreak havoc. It’s quite possible for rates to remain a bit lower throughout the year than what was initially expected.
Having said that, mortgage rates are unpredictable so there’s no guarantee that low rates will last forever. If today’s rates meet your household budget, consider locking something in.
Need a Home Loan?
If you’re in the market to buy a home, Sammamish Mortgage is available to help. We offer a wide variety of mortgage programs and tools with flexible qualification criteria. We’ve been helping buyers obtain the mortgages they need in Oregon, Washington, Colorado, and Idaho since 1992, and we’d love to help you too. Please contact us today to get started.