Great news for home buyers shopping for a home loan or homeowners thinking of refinancing their current home loans. Mortgage rates have been steadily declining and are at the best rates in two years. 30 year fixed mortgage rates and 15 year fixed mortgage rates dropped more than 70 basis points since the beginning of 2014. Even with rumors of rising mortgage rates and the Federal Reserve Board warning that mortgage rates will start going up in the second half of 2015, mortgage rates have been going the opposite direction.
Mortgage Rates And Loan Programs
Mortgage rates are different for different mortgage loan programs. For example, conventional mortgage rates are different than FHA mortgage rates. VA mortgage rates are different than FHA mortgage rates and conventional mortgage rates. VA mortgage rates are much lower than FHA mortgage rates and Conventional mortgage rates. Conventional mortgage rates are the highest mortgage rates today.
VA Mortgage Rates Are The Lowest Of All Loan Programs
Great advantage of being a veteran of the United States Armed Services because VA loans have the lowest mortgage rates. VA mortgage rates are on the average 0.31% lower than the national conventional mortgage rates. VA mortgage rates are even lower than the most popular FHA mortgage rates.
VA loans also do not require mortgage insurance premiums. Home buyers who qualify for VA loans can purchase a home with no money down and get the best mortgage rates available than any other mortgage loan program and do not have to pay monthly mortgage insurance. There is a funding fee that is required but the VA funding fee can be rolled into the VA loan balance.
Mortgage Rates Versus Credit Scores
When mortgage rates are announced, the mortgage rates quoted are mortgage rates for prime borrowers on conventional loans. Prime borrowers are mortgage loan borrowers with 740 FICO credit score or higher and with 20% down payment. Freddie Mac and Fannie Mae are the Government Sponsored Entities that set conventional mortgage rates. Normally, when conventional mortgage rates go up or down, other mortgage rates from other loan programs, such as VA, FHA, USDA follow their lead and go up and down as well.
Credit Scores And Loan To Value Are Biggest Factors With Rates
Credit scores is the biggest factor in determining the mortgage rates a borrower gets quoted for. Comparison of mortgage rates: The higher the mortgage loan borrower’s credit score is, the lower their mortgage rates are. This comparison of mortgage rates hold true for all mortgage loan programs. With comparison of mortgage rates, the higher a borrower’s credit score is, the less risk the borrower has under the eyes of mortgage lenders. There are other factors with regards to comparison of mortgage rates that determine mortgage rates also such as the property type and the amount of down payment. For example, if a home buyer puts down 25% down payment on a conventional loan versus 20% down payment, the mortgage rates will be lower when they put the 25% down payment because the mortgage lender has less risk due to the borrower putting more skin in the game. Mortgage rates on 2 to 4 unit properties are higher than single family homes. Mortgage rates on FHA 203k Loans are higher than standard FHA home loans.