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By Leslie Cook
September 16, 2020

Borrowers with 700 credit scores were quoted an average rate of 3.534% to secure a 30-year fixed-rate purchase mortgage on Tuesday, according to Money’s survey of over 8,000 lenders across the United States. At this credit score, roughly the national average, the average rate for a 30-year refinance was 4.46%. Our rates include discount points and are for borrowers putting 20% down.

30-year fixed-rate purchase mortgage
3.534%
Rate of September 15, 2020
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Borrowers in Illinois were quoted the lowest mortgage rates on Tuesday—at 3.334%. Those in New Mexico saw the highest average rate at 3.753%. Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 3.118%, while those with credit of 640 or below were given rates of 4.949%—a 1.831 percentage point spread.

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 banks 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 2.86%, a new record low, with 0.8 points paid for the week ending September 10. The mortgage purchaser’s weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.

Refinance rates today

Money’s survey shows that the offered rate for a 30 year refinance for someone with a 740 credit score was 3.713% on Tuesday. Last September, the average mortgage rate (including fees) was 3.922%.

30-year fixed-rate mortgage refi
3.713%
Rate of September 15, 2020

A homeowner with a $200,000 mortgage balance currently paying 3.922% on a 30-year loan could potentially cut their monthly payment from $946 to $922 by financing at today’s 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).

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What else is happening in the housing market right now?

In August, the number of applications for loans to purchase newly built homes was 33% higher than during the same period last year, according to the Mortgage Bankers Association’s latest Builder Application Survey. The MBA estimates that new homes sold at an annualized sales rate of 871,000 units last month, compared to a pace of 785,000 recorded last August.

“The new home market has maintained its path of recovery throughout the summer, and record-low mortgage rates and households seeking more space will likely continue to drive demand into the fall,” said Joel Kan, head of economic and industry forecasting at MBA. Compared to July applications decreased by 4%.

The Builder Application Survey keeps track of loan application volumes from the mortgage subsidiaries of home builders across the U.S., and typically provides a fairly accurate early indication of what the U.S. Census’ new home sales number will be. The Census report, which tracks sales data at the moment of contract signing, is set to be released on September 24.

“The housing market continued to exceed expectations in August, as housing demand for new homes stayed strong and the job market continued to recover,” added Kan. “Despite economic uncertainty and the pandemic’s distortion to typical seasonal patterns, the comparisons to August 2019 show strength.”

Meanwhile, the total number of mortgage loan applications decreased for the week ending September 11, according to the MBA’s Weekly Mortgage Applications Survey, down 2.5% from the previous week. Purchase loan applications were down a seasonally adjusted 1% week-over-week and were 6% above year-ago levels, the 17th consecutive week they’ve been above 2019 numbers. Refinance loan applications were down 4% from the previous week but remained 30% higher than year-ago levels, making up 62.8% of the total number of applications.

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Quote of the Week

— Shant Banosian, a loan officer at mortgage lender Guaranteed Rate.

From: Mortgage Rates Are at Record Lows, But What Does It Take to Actually Qualify for a 3% Loan?

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Bottom line:

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Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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