Compare Non-Owner Occupied Mortgage Rates and Lenders
Review current non-owner occupied mortgage rates for June 24, 2017 and get personalized mortgage quotes from top lenders
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Mortgage Rate ReportSaturday, June 24, 2017
Mortgage rates stabilized and continue to remain near their low for the year despite the Federal Reserve's decision to raise the its key federal funds rate .250% in its June meeting. The Fed pointed to labor market strength as well as improved household spending and business investment in deciding to raise the target range for the federal funds rate to 1.000% to 1.250%. The Fed also noted relatively low inflation, including a recent decline, in explaining its decision to raise its target interest rate.
Perhaps because the Fed's rate hike action was so widely anticipated, mortgage rates were mostly unchanged following the Fed's announcement, which is certainly a relief for borrowers as purchase and refinance activity continues to gain momentum.
Instead of following the Fed's lead and climbing, mortgage rates were stable across the board as compared to last week. The interest rate for a 30 year fixed rate mortgage remained at 3.750% while the interest rate for a 15 year mortgage held steady at 2.750%. The interest rate on a 5/1 adjustable rate mortgage (ARM) also stayed put at a low 2.750% as lenders seek to pull borrowers into shorter-termed loan products. FHA and VA mortgage rates were both unchanged at 3.250%, remaining appealing for home buyers seeking low down payment loan options.
Bucking the trend, Jumbo mortgage rates increased .125% to 3.875% and non-owner occupied also rose .125% to 4.125%.
After a relatively turbulent first quarter of 2017, mortgage rates have been relatively stable and attractive for much of the past two months. The trend looks to continue as we move deeper into June, especially in light of mortgage rates' non-reaction to the Fed'smove. We are approaching six weeks of relatively stable mortgage rates that have brought a sense of calm and increased certainty to the marketplace for both borrowers and lenders.
Although recent events reinforce that mortgage rates are impossible to predict, the Fed’s decision to increase the Fed Funds rate and the pullback in mortgage rates over the past month does not change the expectation that rates are likely to rise over the course of 2017, potentially at an accelerated pace. In fact, the Fed reaffirmed its outlook for one more rate increase in 2017. Prospective borrowers looking to buy a home or refinance may be able to lock in a lower interest rate by acting sooner rather than later, before mortgage rates go up again.
Because interest rates fluctuate daily, we continue to actively monitor the mortgage marketplace for changes. Borrowers should check the FREEandCLEAR mortgage rate tables regularly to review customized, updated mortgage rates for lenders in their area. Our rate tables are free to use and require no personal information.
What You Should Know About Non-Owner Occupied Mortgages
Higher Interest Rate.
The interest rates for a mortgage on a non-owner occupied or investment property is usually 0.250% - 0.500% higher than the rate on an owner-occupied property. Additionally, closing costs for non-owner occupied mortgages are also usually higher. Please note that properties that you buy to earn rental income are considered non-owner occupied properties whereas second homes and vacation homes are considered owner occupied properties.
Higher Down Payment Required.
Lenders usually require that borrowers contribute a down payment of 20% - 25% for mortgages on non-owner occupied properties, which means your loan-to-value ratio is 75% - 80%. Additionally, investment properties are not eligible for most conventional or government-backed low or no down payment mortgage programs.
For non-owner occupied mortgages, lenders typically require that borrowers maintain a certain amount of money in reserve at the time your mortgage closes. Reserve requirements range from two-to-six months of total monthly housing expense per property depending on lender guidelines and the number of investment properties you own that are financed with a mortgage. The more investment properties you own (that are mortgaged), the greater the reserve requirement.
Mortgage Tax Benefit Does Not Apply.
The interest expense mortgage tax deduction does not apply to investment properties which is different than an owner-occupied mortgage. Borrowers should contact a tax specialist or accountant to review how tax guidelines apply to investment properties and non-owner occupied mortgages.
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More FREEandCLEAR Mortgage Resources
We review the key points borrowers should understand about non-owner occupied mortgages
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Our 30+ mortgage calculators cover every element of the mortgage process. Whether you are buying a home or refinancing your mortgage, let our calculators do the analysis for you
Non-owner occupied mortgages can be challenging so hit up the FREEandCLEAR Mortgage Expert with any questions. The feature is free to use plus you will receive an insightful answer within 24 hours