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By Leslie Cook
September 21, 2020

Borrowers with 700 credit scores were quoted an average rate of 3.625% to secure a 30-year fixed-rate purchase mortgage on Friday, according to Money’s survey of over 8,000 lenders across the United States. At this credit score, roughly the national average, the rate for a 30-year refinance was 4.523%. Our rates include discount points and are for borrowers putting 20% down.

30-year fixed-rate purchase mortgage
3.625%
Rate of September 18, 2020
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View Rates for November 24, 2020

Borrowers in Ohio were quoted the lowest mortgage rates on Friday—at 3.413%. Those in Colorado saw the highest average rate at 3.854%. Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 3.162%, while those with credit of 640 or below were given rates of 4.92%—a 1.758 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 2.87% with 0.8 points paid for the week ending September 17. 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 also shows that the offered rate for a 30 year refinance for someone with a 740 credit score was 3.799% on Friday. Last September, the average mortgage rate (including fees) was 3.922%.

30-year fixed-rate mortgage refi
3.799%
Rate of September 18, 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 $932 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?

U.S. homeowners with mortgages saw their equity increase during the second quarter of 2020, rising 6.6% over the past year, according to a report by real estate data and analytics provider CoreLogic. This represents a total gain of $620 billion and an individual gain of $9,800 per homeowner since the second quarter of 2019. Homeowners with mortgage represent 63% of all properties.

“Homeowners’ balance sheets continue to be bolstered by home price appreciation, which in turn mitigated foreclosure pressures,” said Frank Martell, president and CEO of CoreLogic. “Although the exact contours of the economic recovery remain uncertain, we expect current equity gains, fueled by strong demand for available homes, will continue to support homeowners in the near term.”

According to the report, home prices were up 4.3% year-over-year as low mortgage rates, high buyer demand and tight inventory increased competition for available homes. CoreLogic predicts home prices will increase during the next two quarters but at a slower pace until home prices stabilize next year and equity gains beome negligible.

Meanwhile, the share mortgages with negative equity — when the borrower owes more than the home is worth — decreased 15% to 1.7 million properties (3.2% of all properties). Year-over-year, the national aggregate value of negative equity was down 6.6%, from the second quarter of 2019 to $284 billion.

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Mortgage Term of the Week

Understanding the lingo can be key to avoiding mistakes when you are buying a home or refinancing a mortgage.

Closing Costs: Expenses paid by the borrower to complete a mortgage loan transaction, these can include origination and appraisal fees, discount points, title insurance, attorney’s fees and survey costs among others. Closing costs usually run 3% to 6% of your loan amount. So between $9,000 and $18,000 on a $300,000 mortgage.

For more read: Everything You Need to Know About Mortgage Rates in 2020

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Bottom line:

Congratulations, Home Seller: A Bidding War Just Broke out for Your House. Here’s How to Pick the Best Offer

The Overlooked Reason It’s So Hard to Buy a Home in 2020

Millions of Homeowners Are Falling Behind on Their Mortgage Payments. Here Are Your Options if You’re One of Them

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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