Average 30 year fixed mortgage rates have dropped below 3.5% twice in the month of June 2012. At the very beginning of the month the 30 year fixed rate hit 3.48% for one day. After a move to all time lows the 10 year treasury rate yield bounced and pushed rates higher. On Friday, we saw average 30 year loan rates drop to 3.48% again. On Monday, June 18th, 2012 the average fixed rate has remained at this level with very little volatility.
Financial Institutions and Banks Still Offer Attractive Loan Rates
Since the credit crisis major financial institutions have been willing to offer very attractive interest rates to borrowers. Shortly after the credit crisis it was a little bit harder for common Americans to gain access to these loans. Banks were very strict with their lending practices as their peers were going out of business each and every week. Now that the financial sector is on stable footing it is a little bit easier for potential homeowners to gain access to low rates.
It is very important for homeowners to realize that not all borrowers will be able to lock in 30 year rates at 3.5%. If individuals have a very bad credit score that is below 600 it will be impossible to get 30 year loan rates under 5%. Banks are going to deem this borrowers as risky and they are not going to offer them the opportunity to borrow money at cheap rates. Some of the largest financial institutions in the country are Bank of America, Citigroup, Wells Fargo and JP Morgan Chase but the FDIC insured well over 7000 local community and small banks as well.
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Refinance Savings Determined by Closing Costs
Although mortgage interest rates are very close to an all time low it does not mean refinancing is the best option. In fact, it might be the case that refinancing will end up costing borrowers more than they will save. Generally speaking, individuals should desire to save at least one full percentage point if they hope to benefit from refinancing. If a full percentage point cannot be saved closing costs will usually outweigh the savings.
There are a number of free mortgage calculators available online that should help homeowners create a proper break even point. If homeowners are unwilling to do the calculations they may miss out on some amazing opportunities. All financial lenders should be willing to sit down and crunch the numbers but individual due diligence is always suggested.