Mortgage credit is still tighter today than it was during the lead-up to the housing bust, but it has loosened a little every year since 2009. Whether you're buying or refinancing, it's easier to get a mortgage at rates that are still at historically low levels. The average 30-year fixed rate hovered around 4% in the past year, dipping to 3.76% at the end of October. That makes six years in a row that the 30-year fixed rate has been below 5%, and the pattern won’t change in 2016. Kiplinger expects the 30-year fixed rate to end the year at 4.4%.
The interest-rate premium for conforming jumbos (loans of $417,000 to $625,500) that lenders added during the financial crisis has mostly disappeared. Jumbos (loans of more than $625,500), which lenders typically hold on their own books, occupy a sweet spot, says Guy Cecala, publisher of Inside Mortgage Finance. This past fall, lenders offered jumbo rates as low as 3.6%. They consider jumbos to be relatively low risk because borrowers typically have a high credit score and a large down payment.
Borrowers who want to buy or refinance will find fixed-rate and adjustable-rate loans backed by Fannie Mae and Freddie Mac that require just 5% down. Freddie Mac offers a 3%-down-payment program to home buyers with low to moderate incomes, which can provide a less costly alternative to loans insured by the Federal Housing Administration that require 3.5% down but impose up-front mortgage insurance costs.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
Is Trump's Tax Plan Speeding Up the Looming Social Security Funding Crisis?Social Security Social Security's combined retirement funds are running out of cash, and its insolvency date is expected to occur in less than a decade.
-
How to Keep Your Work Friends After You RetireWork friendships can boost teamwork, lift your spirits, and make the job more fun. But when you retire, these friendships can fade. Here's a look at why that happens and what you can do about it.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRAs allow you to fund your retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2025 limits and income-based phaseouts.
-
How to Search For Foreclosures Near You: Best Websites for ListingsMaking Your Money Last Searching for a foreclosed home? These top-rated foreclosure websites — including free, paid and government options — can help you find listings near you.
-
Luxury Home Prices Rise as the Rich Dodge High Mortgage RatesLuxury home prices rose 9% to the highest third-quarter level on record, Redfin reports, growing nearly three times faster than non-luxury prices.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
When Is Amazon Prime Day? Everything We Know, Plus the Best Deals on Apple, Samsung and MoreAmazon Prime Amazon Prime Day is four days this year. Here are the key details you need to know, plus some of our favorite deals to shop during the sale.
