National Average Mortgage Rates or Mortgage Rates at Par? What’s Real?
By: Ed Ferrara
So you’ve been searching mortgage rates online, you’ve stopped by 4 different websites and read 4 different national averages. You thought you were going to spend 30 minutes online, educate yourself and go into your loan negotiations an educated borrower. Now you’re feeling a bit confused. Is the 30 year fixed rate 5.4, 5.1 or 4.9? Who’s got the correct information and how can I tell. Truth is when it comes to national averages they’re outdated, inaccurate, and usually higher than the real mortgage rates. Maybe you’ve noticed this. Without naming any names let me tell you there’s a prominent mortgage rate website who’s national average 30 year fixed mortgage rates are quoted religiously by financial writers across the country that today says the average 30 year fixed mortgage rate is 5.22%. If you’re a top qualified borrower and you’re receiving a 5.22% rate on a 30 year fixed mortgage I’ve got one word for you, ouch. Fact is today 30 year fixed mortgage rates were at 4.875%. That was a par rate. A par rate is a rate in which you pay a point or so origination, title, escrow, bank fees, and the appraisal and call it a day. The lender and or broker has made their money (plenty of it) and both parties usually walk away with a smile on their face. An unwritten rule for banks and brokers, at least in the old days, was to make 1 point on the deal. If a lender gives you a mortgage at par and charges you a point they should walk away happy, at least before predatory lending came around this was the case. FreeRateUpdate.com reports mortgage rates at par. We’re able to do this because we research wholesale lender’s mortgage rate sheets. Next time you’re looking into interest rates check out our par rates and ask your loan officer about it.