Mortgage rates hit to their lowest point of the year this week, with the 30-year fixed-rate mortgage falling to 4.1% from 4.12% last week, according to Freddie Mac’s weekly Primary Mortgage Market Survey. This time last year, those rates exceeded 4.5%, but they haven’t spiked above 4.2% since May.
A weekly report from the Mortgage Bankers Association showed an average 30-year fixed rate of 4.29%, down from last week’s 4.35%, along with a 1.4% increase in mortgage applications. In a news release about the report, MBA Chief Economist Mike Fratantoni attributed the rate decline to tumultuous international affairs.
Historically, mortgage rates remain low, though home loan originations have been on the decline for the past year. In the second quarter of this year, $292 billion in home loans were issued, down from $555 billion at the same time in 2013, according to the latest Experian-Oliver Wyman Market Intelligence Reports.
If you’re thinking of taking out a home loan, it’s smart to track the shifts in interest rates, but you should also monitor a metric you can control: your credit standing. The average mortgage rate is only one indicator in the potential cost of a home loan; what you bring to the table will also have a large impact on your loan’s cost.
Before you start house and loan shopping, review your credit reports for accuracy, and get a feel for your credit standing by routinely checking your credit scores. You can get two of your scores for free on Credit.com, and by seeing the main factors influencing your scores, you can make changes to your financial behavior that could result in thousands of dollars saved by qualifying for a lower mortgage rate.
Not only will you have to prove you are creditworthy, you’ll also have to exhibit an ability to repay the loan. Familiarize yourself with the documentation needed to complete a home loan, so you’re well-prepared and can expedite the mortgage process. Whether you’re a first-time homebuyer or an experienced borrower in need of a refresher, there are plenty of resources available in Credit.com’s Mortgage Learning Center that can help you start the homebuying process with confidence.
More on Mortgages and Homebuying:
- Why You Should Check Your Credit Before Buying a Home
- How to Find & Choose a Mortgage Lender
- How to Get a Loan Fully Approved