Mortgage rates fall again to 4 percent but why you can't always get the lowest rate
As a Charleston real estate agent, I generally quote mortgage rates to clients (or readers of this blog) in nice round numbers like 4, 4 1/4, 4 1/2, etc., based on what rates my preferred lenders are currently offering.
Back in the old days of 6 percent mortgages, it was really easy to let buyers know what their monthly payment would be, at 6 percent, your payment is exactly $6 per thousand so a $200,000 mortgage loan would have a payment of $1200 plus taxes and insurance. At 4 percent, it isn't quite as easy and the payment is not exactly 33 1/3 percent less which would be $4.50 but it's actually $4.77 per thousand. And the purpose is to let buyers know approximately what price range they should comfortably be looking at.
Well, after slipping slightly below 4 percent about a month ago, rates trended up but with the European sovereign debt fiasco in full swing, money flowed back into US Treasuries which is a proxy for mortgage rates and they're back to 4 again. I should point out that today, there seems to be good news from Europe so rates are probably already higher than first thing this morning. Here's more from MarketWatch.
And speaking of MarketWatch, my new favorite columnist Amy Hoak writes about why you can get the lowest mortgage rates. She mentions points (prepaid interest to buy down the rate), your credit score and loan to value ratio, type of dwelling (single family or condo) and primary residence vs. 2nd home or investment property, proof of current income (for the self-employed and by the way, if you are and you are hiding income from the government, don't expect to be able to claim that income when you apply for a loan, I'm just sayin'), and finally, choosing a lender who isn't hungry for business. It's good stuff from Amy, go over and read the entire article.