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Mortgage rates slump to 2-year low – but consumers may not bite

Courtesy of Propy

Lower monthly money for homeowners.

Rates for home loans slid as investors snatched up bonds in the wake of intensifying global trade.

The 30-year fixed-rate mortgage averaged 3.82% in the May 30 week, down from 3.99%, Freddie Mac said Thursday. It was the lowest level since September 201


The 15-year fixed-rate mortgage averaged 3.28%, down from 3.46%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.52%, down eight base points.

Fixed-rate mortgages follow the path of the 10-year US. Treasury note

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. Investors are flocking to bonds as trade was worries wallop markets and the end of the economic cycle appears to be drawing nearer. When bond prices rise, yield case.

Related: Get set for U.S. bond yields to skid much lower, warns J.P. Morgan

Freddie Chief Economist Sam Khater calculates that most mortgages taken out in 2018 are now eligible to be refinanced. But the favorable climate for rates may be of little help to Americans in the housing market.

A recent study from Fannie Mae shows that "most consumers have little idea of ​​what they are getting into a mortgage." "Overestimate mortgage qualification requirements." When asked the minimum FICO score lenders require for mortgages, the median response was 650. In fact, borrowers with credit scores as low as 580 may qualify for mortgages. When asked, the median response was 10%, when in fact many programs, including some backed by Fannie, allow borrowers to make payments as low as 3%.

What does this lack of awareness tell us? They also note that "misperceptions about mortgage qualifications may be people holding back." [19659004] See: The average adjustable-rate mortgage is nearly $ 700,000. Here's what that tells us.

If consumers believe it's more onerous to get a mortgage than the case, "they may avoid further research or preparations, such as saving for a down payment or improving their credit," the Fannie Studies wrote.

But the financial literacy about mortgage lending may be a deeper problem than helping would-be buyers. As the those who wrote wrote, "Even those who are looking for more knowledgeable, such as current homeowners, those who say they are becoming homeowners in the next three years, and those who do not have much more knowledgeable

Related: Hidden Realtor commissions could be next housing market domino to topple as government probes MLS

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