Compare Non-Owner Occupied Mortgage Rates and Lenders
Review current non-owner occupied mortgage rates for August 21, 2017 and get personalized mortgage quotes from top lenders
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Mortgage Rate ReportMonday, August 21, 2017
Mortgage rates continued their winning streak, remaining steady for the fourth consecutive week following the Federal Reserve's decision to leave interest rates unchanged at its July meeting. The Fed pointed to low inflation as a counterbalance to an improved labor market as well as expanding household spending and business investment in its decision to maintain the target range for the federal funds rate at 1.000% to 1.250%. Industry analysts had expected the Fed to stay put on interest rates at the July meeting so the decision has had relatively little impact on mortgage rates since the announcement. A strong jobs report to open August failed to move rates higher as expected and instead key mortgage rates remained flat on the week and continue to hover near their low point for 2017.
The interest rate for a 30 year fixed rate mortgage held steady at 3.625% and jumbo mortgage rates also remained flat at 3.750%, while other mortgage programs followed suit. The interest rate for a 15 year mortgage stayed put at 2.875% and the interest rate on a 5/1 adjustable rate mortgage (ARM) held at 2.750%, as lenders attempt to pull borrowers into shorter-term mortgage programs. VA mortgage rates remained at 3.250%, matching FHA mortgage rates which were also steady at 3.250%, with both programs remaining enticing for home buyers seeking low or no down payment loan options. Non-owner occupied mortgage rates were the sole mover on the week, dipping 0.125% to 3.750%.
After a turbulent first quarter of 2017, mortgage rates were relatively steady and attractive for much of the the second quarter. As we move deeper into the third quarter, the Federal Reserve's decision to hold interest rates at their current level further stabilized the mortgage market. Another week of flat rates means we are approaching multiple months of relatively stable and low mortgage rates that have brought increased certainty to the marketplace for both borrowers and lenders.
Despite the relatively steady current mortgage market, mortgage rates remain highly challenging to predict. The Fed’s decision to leave rates unchanged at its July meeting only bolsters the likelihood that the Fed will raise rates at a future meeting in 2017. In fact, the Fed reaffirmed its outlook for another rate increase in 2017 and recent strong labor and economic reports, including a decline in the unemployment rate and robust jobs growth, reinforce the potential for a future rate hike. Additionally, a Fed official recently reiterated the Federal Reserve's intention to raise interest rates before year end despite continued low inflation. Prospective borrowers looking to buy a home or refinance their mortgage may be able to lock in a lower interest rate by acting sooner rather than later, before mortgage rates increase, potentially at an accelerated pace.
Because interest rates change daily, we continue to actively monitor the mortgage market 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
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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