This BLOG On Comparison Of Mortgage Rates On Purchase And Refinance Was UPDATED On July 7th, 2019

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 and 15 year fixed mortgage rates dropped more than 70 basis points since the beginning of 2019
• Even with rumors of rising mortgage rates and the Federal Reserve Board warning that rates will start going up in the second half of 2019, mortgage rates have been going the opposite direction

In this blog, we will discuss Comparison Of Mortgage Rates On Purchase And Refinance.

Mortgage Rates And Loan Programs

Mortgage rates are different for different mortgage loan programs.

• For example, conventional rates are different than FHA rates
• VA mortgage rates are different than FHA and conventional mortgage rates
• VA rates are much lower than FHA and Conventional mortgage rates
• Conventional loans have the highest mortgage rates today when it comes to government and conforming loans

VA Mortgage Rates Are The Lowest Of All Loan Programs

The great advantage of being a veteran of the United States Armed Services is being able to qualify for VA Loans:

• VA loans have the lowest mortgage rates
• VA mortgage rates are on the average 0.31% lower than conventional loans
• VA rates are even lower than the most popular FHA 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
• Borrowers can get the best mortgage rates available than any other loan program
• Borrowers do not have to pay monthly mortgage insurance
• There is no maximum loan limit on VA Loans
• There are no minimum credit score requirements
• There is no maximum debt to income ratio caps on VA Loans

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 rates quoted are rates for prime borrowers on conventional loans.

• Prime borrowers are borrowers with 740 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 are the biggest factor in determining the mortgage rates a borrower gets quoted for.

Comparison of mortgage rates:

• The higher the borrower’s credit score is, the lower their mortgage rates are
• This comparison of mortgage rates holds true for all loan programs
• With the comparison of mortgage rates, the higher a borrower’s credit score is, the less risk the borrower has under the eyes of lenders
• There are other factors with regards to the comparison of mortgage rates that determine rates 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 rates will be lower when they put the 25% down payment
• This is because the 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
• Non-QM Mortgage Rates are higher than conforming traditional loans because of the higher risk lenders take

For more information on this article or other mortgage-related topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com. Gustan Cho Associates Mortgage Group is available 7 days a week, evenings, weekends, and holidays.