below 3% for a 30-year loan.” data-reactid=”32″ type=”text”>You’ve seen the headlines: With the economy in a COVID-19 tailspin, mortgage rates that have been falling and falling have now reached depths below 3% for a 30-year loan.
The national average rate dropped earlier this month to an all-time low 2.98%, according to mortgage giant Freddie Mac, which has been tracking rates since 1971. On Thursday, Mortgage News Daily reported that the average sank to an even more jaw-dropping 2.87%.
But if you’re a homeowner wanting to refinance or a homebuyer ready to make a purchase, you can’t assume that a mortgage lender will always give you one of those spectacularly low rates.
In some cities, different lenders can offer rates that vary by close to one full percentage point, a recent study from LendingTree found.
30-year fixed-rate mortgage at 3.9%. But you might discover that Lender Y will offer you the same loan at just 2.95%.” data-reactid=”40″ type=”text”>In other words, Lender X might want to give you a 30-year fixed-rate mortgage at 3.9%. But you might discover that Lender Y will offer you the same loan at just 2.95%.
How do you land a mortgage rate south of 3%? Industry experts offer these four tips.
1. It really pays to shop around
Don’t stop your mortgage search at Lender X — because there might very well be a Lender Y out there with a much more attractive rate.
gather rates from multiple lenders, the LendingTree study found.” data-reactid=”44″ type=”text”>Homebuyers who say yes to the very first mortgage offer end up paying an average of around $37,500 more in total interest over the course of a 30-year loan than buyers who gather rates from multiple lenders, the LendingTree study found.
“It pays to do your research,” says Tendayi Kapfidze, LendingTree’s chief economist.
Compare not only interest rates but also APRs, or annual percentage rates, which factor in origination fees and other expenses to give you a more comprehensive look at the yearly cost of the loan.