30-Year Mortgage Rates Back Under 5%

RISMEDIA, February 13, 2010—(MCT)-Average rates for traditional 30-year fixed-rate mortgages have fallen below 5% again, Freddie Mac recently reported.

The giant mortgage buyer’s weekly survey, conducted Monday through Wednesday, pegs the average rate nationally at 4.97%, with 0.7% of the loan balance on average paid in upfront charges, or points. Last week, 30-year rates averaged 5.01%. That continues a trend so far this year in which the average has come in either just above or just below 5%.

The survey asks 125 lenders across the country the rates they are offering to borrowers with good credit and a 20% down payment, or at least 20% equity for those refinancing their home loans.

The approaching end of Federal Reserve purchases of Freddie Mac and Fannie Mae mortgage bonds is expected to result in rate increases later this year. The Mortgage Bankers Association estimates the typical interest rate might rise by half a percentage point. If the average 30-year fixed rate rose a half-point to 5.5%, that would still be unusually low by historical standards.

Nonetheless, such an increase would make any home purchase somewhat more expensive and could put an end to a continuing mini-boom in refinancings, which have accounted for about two-thirds of home-loan applications this year.

Distributed by McClatchy-Tribune Information Services.

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