There’s good news for you if you’re planning to purchase a home in 2017. Mortgage rates, which were as high as four and a quarter percent in January, are now at the lowest rate this year (as of June 1.) If you’ve been saving for your down payment, and working on your credit and were discouraged by upward trending rates, now may be the time for you to consider going forward with a new mortgage application for your dream home.
FreddieMac reports 30 year fixed rate mortgages have fallen to a new low at 3.94%.
In a short week following Memorial Day, the 10-year Treasury yield fell 4 basis points. The 30-year mortgage rate remained relatively flat, falling 1 basis point to 3.94 percent and once again hitting a new 2017 low.
Graphed, the mortgage rate looks like the downward slope of a mountain. This is great for people who have been getting ready to purchase a new home. Along with the declining mortgage rate, new mortgage application volumes have been falling. As a result, not only is there more money available to lend, your mortgage banker may be more eager to hear from you now.
FICO credit score requirements have also been easing with a clear downward trend line. According to Kenneth Harney,
FICO scores on most successful applicants remain well above historical averages, but significant numbers of home buyers are squeaking through with sub-par scores. (FICO scores run from 300 to 850, with the upper end of the scale indicating lower risk of default.)
As charted by Simplifying the Market, FICO Score requirements as reported by Ellie Mae show an 11-point decline since September 2016. (Graph attribution Simplifying the Market.)
In other good news, after you have found the home you wish to purchase and obtained a mortgage, the time to closing keeps falling. Ellie Mae reported that days to close stood at 43 in March 2017, which is the shortest time to closing since 2015.
While factors such as lower mortgage percentage rates, and lower credit scores don’t necessarily motivate homebuyers — life changes such as a new job, marital status change do — these small changes can further motivate buyers who are in the market. That being said, lower mortgage rates, more mortgage money available, lower credit score requirements, and faster closing times do make homebuying process easier for the majority of buyers.
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