Compare Non-Owner Occupied Mortgage Rates and Lenders
Review current non-owner occupied mortgage rates for April 30, 2017 and get personalized mortgage quotes from top lenders
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Mortgage Rate ReportSunday, April 30, 2017
After holding steady for the past two weeks, mortgage rates inched higher on the week although rates remain highly attractive for borrowers. Despite the Fed's decision to raise interest rates in March and its more hawkish forecast for 2017, mortgage rates had actually dropped significantly since the Fed's announcement and hit their low point for the year last week before moving slightly higher.
Mortgage rates jumped .250% to .375% in advance of the Federal Reserve's meeting as most lenders factored the rate hike into their mortgage rate pricing before the Fed's official announcement. In the weeks following the Fed's decision, the mortgage market settled down with mortgage rates falling .375% to .500% across all mortgage programs. Enhanced clarity into the Fed's decision-making process and a rebound in the bond market amidst global geopolitical uncertainty helped push mortgage rates lower and stabilized the market after after weeks of turbulence.
Mortgage rates climbed moderately on the week with the interest rate for a 30 year fixed rate mortgage up .125% to 3.875% while the interest rate for a 15 year mortgage moved to 3.000%. The interest rate on a 5/1 adjustable rate mortgage (ARM) also increased .125% to 2.875%. VA and FHA mortgage rates also moved higher but continue to be highly appealing for home buyers seeking low down payment options with FHA and VA mortgage rates both sitting at an attractive 3.375%. Non-owner occupied mortgage rates were not exempt from the market's gravity and rose .125% to 4.125%. Jumbo mortgage rates bucked the trend for the week and remained at 3.875%, consistent with the interest rate for a conforming 30 year fixed rate loan.
After touching their low for the year, mortgage rates moved higher but remain relatively stable this week despite signs of growing economic momentum that appear to be influencing the Federal Reserve's decision making. The positive domestic economic news has recently been offset by increasing global turmoil which pushed bond prices higher while moving mortgage rates lower. Positive signs from the housing market over the past week, however, may have provided the catalyst for the increase in rates.
Although the past several weeks prove that interest rates are impossible to predict, the Fed’s decision to raise the federal funds rate and its more aggressive forecast signal that mortgage rates are likely to rise over the course of 2017, potentially at an increased pace. 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 are unpredictable 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
Our mortgage expert offers money and time-saving advice for getting a mortgage on an investment property
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