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Mortgage Rates by Loan Product
Mortgage Rate ReportTuesday, January 23, 2018
Mortgage rates were mixed on the week although they seem to be gradually moving higher in response to the Federal Reserve's decision to raise interest rates in its December meeting. The Fed highlighted continued job growth, declining unemployment, expanding household spending and increasing business investment in its decision to increase the key Federal Funds rate by .250% to 1.250% to 1.500%. From the Fed's perspective, the positive labor and economic indicators outweighed lower than targeted inflation to justify the interest rate hike, which was widely anticipated.
Although mortgage rates surprisingly dropped immediately after the Fed's announcement, the dip was short lived and we have seen rates move moderately higher over the course of January. A string of positive labor market reports combined with the continued strength of the stock market has pushed treasury yields higher, with mortgage rates responding in similar fashion. While mortgage rates continue to be attractive, they have rebounded from their post Fed meeting lows and rates were flat or higher this week, depending on the loan program.
The interest rate for a 30 year fixed rate mortgage held steady at 3.875% and the interest rate for a 15 year mortgage also remained flat at 3.125%. The interest rate on a 5/1 adjustable rate mortgage (ARM) was stable at 3.250%, remaining attractive to borrowers seeking shorter-term mortgage programs. Jumbo mortgage rates also stayed put at 4.000% after increasing last week. On the flip side, non-owner occupied mortgage rates rose 0.125% for the second week in a row to 4.250%. FHA mortgage rates and VA mortgage rates also climbed with FHA rates increasing 0.250% to 3.500% and VA rates rising 0.125% to 3.375%. Although both FHA and VA mortgage rates inched higher, the programs remain appealing to borrowers focused on low or no down payment loan options, especially first-time home buyers.
The Federal Reserve's decision to increase interest rates was anticipated and although mortgage rates dropped briefly they have since followed the Fed's lead and moved higher in January. With the Fed reinforcing its outlook for multiple anticipated interest rate hikes in 2018 and economic momentum continuing to build to start the year, prospective borrowers looking to buy a home or refinance their mortgage may be able to lock in a lower mortgage rate by acting sooner rather than later, before interest rates rise, potentially at an accelerated pace.
Because mortgage rates fluctuate daily, we continue to actively monitor the mortgage market for updates. 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.
Why Select an VA Mortgage
No Down Payment.
The VA home loan program enables eligible borrowers to buy a home with no down payment which means they can get a mortgage for 100% of the property purchase price. Most mortgage programs require borrowers to make a down payment of 3% - 20%. Active and retired military personnel, including individuals in the reserves and national guard are eligible for the VA home loan program.
Low Interest Rate.
The interest rate for a VA mortgage is typically .250% - .500% lower than the current interest rate on a conventional loan or other low / no down payment mortgage programs. This is because military personnel are considered credit-worthy borrowers and because the government guarantees 25% of the loan amount, which protects the lender against default. To help pay for the guarantee, VA loan program requires borrowers to pay a one-time, up-front VA funding fee. The funding fee ranges from 1.25% - 2.15% of the loan amount depending on your down payment, type of military service and if this your first time using a VA mortgage program.
No Ongoing Mortgage Insurance.
Unlike the FHA program and most other low or no down payment mortgage programs, the VA program does not require borrowers to pay an ongoing mortgage insurance premium. Not requiring ongoing mortgage insurance reduces your total monthly housing expense and makes owning a home more affordable.
For Home Purchases and Refinancings.
Borrowers can use the VA home loan program to buy a home or to refinance their existing mortgage. The VA offers a special refinance program, also known as a VA Streamline or IRRRL Refinance, that requires less paperwork than a regular refinance, making the process more efficient for borrowers. The VA also offers the the VA Energy Efficient Mortgages (EEM) Program that enables borrowers to include up to $6,000 in energy efficiency home improvements in their VA loan amount.
Why Borrowers Compare Mortgage Rates on FREEandCLEAR
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More FREEandCLEAR Mortgage Resources
Determine what size VA mortgage you qualify for and the amount of the required up-front VA funding fee
Review our in-depth overview of of the VA home loan program including borrower qualification guidelines and loan limits
Review our detailed comparison of low and no down payment mortgage programs including key program attributes and eligibility requirements
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