After two weeks of increases, the share of home loans still in forbearance plans was unchanged as the pace of entries outpaced the number of loans exiting the payment deferral plans.
Meanwhile, mortgage rates are down slightly.
Today's Mortgage Rates
The average rate for a 30-year fixed-rate purchase mortgage was 3.193% on Monday. On Friday, the average rate was 3.231%.
Money's mortgage rates include data from over 8,000 lenders across the United States and are updated daily. These rates include discount points and represent what a borrower with a 20% down payment and 700 credit scores — roughly the national average FICO score — would have been quoted.
|Mortgage Rates for December 8, 2020|
|Loan type||Average Rate|
|30-Year Fixed Loan||3.193%|
|15-Year Fixed Loan||2.415%|
|30-Year FHA Loan||3.166%|
|30-Year VA Loan||3.292%|
|30-Year Jumbo Loan||3.611%|
Source: Money | Date: Dec. 7, 2020 | Rates assume a credit score of 700
How do I get the best mortgage rates?
Mortgage rates vary from state to state. On Monday, borrowers in Illinois were quoted the lowest mortgage rates — at 3.037%. People looking for mortgages in Nevada saw the highest average rate at 3.418%.
Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 2.874%, while those with credit of 620 or below were shown rates of 4.671%.
You may be able to negotiate a lower rate if you shop around or if you have other accounts with the lender. (Money's picks for the best mortgage lenders are here.) Currently, some lenders are hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.
Freddie Mac's widely quoted Primary Mortgage Market Survey put rates at 2.71% with 0.7 points paid for the week ending December 3. This is the 14th record low set so far this year and .01 percentage point below the previous low of 2.72%. The mortgage purchaser's weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.
Today's Mortgage Refinance Rates
Money's survey also shows that the offered rate for a 30-year refinance for someone with a 740 credit score was 3.378% on Monday. Last December, the average mortgage rate (including fees) was 3.88%.
|Refinance Rates for December 8, 2020|
|Loan type||Average Rate|
|30-Year Fixed Loan||3.378%|
|15-Year Fixed Loan||2.722%|
|30-Year FHA Loan||3.621%|
|30-Year VA Loan||3.748%|
|30-Year Jumbo Loan||3.557%|
Source: Money | Date: Dec. 7, 2020 | Rates assume a credit score of 740
A homeowner with a $200,000 mortgage balance currently paying 3.88% on a 30-year could potentially cut their monthly payment from about $940 to about $885 by financing at the current lower rates. To determine if it's worth it to refinance your mortgage, also consider the closing fees you paid on your current mortgage, how much your new lender is charging and how long you have left on your loan term. (Our picks for the best lenders for refinancing are here).
What else is happening in the housing market today?
The share of loans in forbearance remained steady at 5.54% during the week ending November 29, according to the Mortgage Bankers Association. The share of Fannie Mae and Freddie Mac loans in deferral decreased by 2 basis points to 3.34%, while all other loan types saw increases.
"While new forbearance requests declined for the week, exits slowed to a new low for the series," said Mike Fratantoni, chief economist for the MBA. Fratantoni went on to note that the slowdown in forbearance exits corresponds with the surge in new COVID-19 cases coupled with the economic slowdown in November.
"It is not surprising to see the rate of forbearance exits slow, as households that needed forbearance assistance in October may be in even greater need now," he said.
About 20% of deferred loans were in the first 180 days of forbearance. The CARES Act, passed by Congress in March, allows homeowners to pause loan payments for up to a year due to hardship from the pandemic, but borrowers need to renew forbearance after six months. Nearly 78% of borrowers were in a plan extension, meaning the homeowners had requested an additional period of payment postponements. Roughly 2% were loans that had exited the program but later re-entered.
Mortgage Prediction of the Week
Expert views on what comes next.
Lawrence Yun, chief economist for the National Association of Realtors, on what the housing market will do in 2021:
For more read: The New Rules for Buying a House in 2021.