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September 29, 2011

‘Record Low Rate’ Headlines Are For Expired Rates

September 29, 2011

‘Record Low Rate’ Headlines Are For Expired Rates

Today’s headlines are filled with ‘record low’ headlines. Yes rates are stunningly low, but the “new record” is for rates from the past 3-4 business days—this from the official source Freddie Mac, which releases this data each Thursday.

So headline rates are expired by the time you’re reading about them, and here’s some other fine print most media stories don’t catch: those rates are only for loans to $417k, single family homes only, owner-occupied only, and those loans have .7% to .8% in points (aka extra fees) on top of a full set of closing costs.

So if you bought a condo with 20% down earlier this year and you’re looking for a zero-cost refinance of your $475k loan, your rate quote as of today is was about .875% higher than the headlines you’re reading.

Here’s more fine print on Freddie Mac’s weekly rates that dominate headlines.

Rates change throughout each day as mortgage bonds trade, and a rate quote is based on your profile and your property profile, so it must come from a lender to be specific.

Below are Freddie Mac’s September rates. They show points, and remember these are for owner-occupied single family home loans to $417k. And they’re for rates that lenders reported to Freddie Mac from late last week and early this week.

Late last week, rates were a lot lower as mortgage bonds rallied after new Fed rate help, but bonds gave up those gains and rates came up again.