Posted To: Mortgage Rate Watch
Some mortgage companies have generated buzz by advertising 30yr fixed rates of 1.99%. While it is possible to obtain such a rate, there is definitely a catch. Rates are certainly low in the big picture. Up until this week, they were as low as they’ve ever been . The average lender was easily able to do a conventional 30yr fixed in the high 2% range for ideal scenarios. The situation has deteriorated fairly rapidly since then. More on that in a moment. For now, let’s pretend rates are still at all time lows, because even when that was the case, 1.99% still wasn’t what it appeared to be. The key concept that will help us understand why we could see 1.99% advertised when the average lender is almost a full percentage point higher is that of upfront costs vs interest rate. Fortunately, it’s pretty…(read more)
Source: Mortgage News Daily
