Shorter Term Mortgages Becoming Popular as Mortgage Rates Fall

August 17, 2011 (Shirley Allen)

Shorter term mortgages have grown more attractive to borrowers as interest rates on fixed rate loans continue to decline fueling a 31 percent increase in 15-year fixed rate mortgage requests according to the data collected by LendingTree’s Weekly Mortgage Rate Pulse.

Fixed Rate Mortgages (FRM) as of August 16, 2011:

The average home loan rates offered by network lenders for 30 year FRMs was 4.35 percent (4.59% APR), which is down from 4.49 percent reported the previous week.

The lowest mortgage rate offered for a 30 year FRM was 3.875 percent (4.01% APR), which is down from 4.125 percent offered the week before.

The average home loan rates offered by network lenders for 15 year FRMs was 3.59 percent (3.68% APR), a drop from 3.72 percent reported the previous week

The lowest mortgage rate offered for a 15 year FRM was 3.125 percent (3.36% APR), which is down from 3.25 percent offered the week before.

Adjustable Rate Mortgages (ARM) as of August 16, 2011:

The average home loan rate offered by network lenders for 5/1 adjustable rate mortgages (ARM) was 3.56 percent (3.80% APR), which was up from 3.40 percent reported last week.

The lowest mortgage rate offered for a 5/1 ARM was 2.5 percent (3.04% APR), which is down from 2.625 percent offered the week before.

“Lenders on the network have recently seen more borrowers make the rational switch to shorter-term mortgages,” says Mark Fowler, senior vice president of exchange operations at LendingTree. “With rates as low as we’re seeing today, it makes sense to consider shorter term loan options where borrowers can quickly build equity and pay less interest. Homeowners who want to refinance should at least look into less popular loan options like a 15-year fixed-rate mortgage. If it financially makes, you’ll be able to shave years off the loan”

The LendingTree Weekly Mortgage Rate Pulse is a snapshot of the lowest and average home loan rates available within the LendingTree network of lenders and is compiled every Wednesday from data that is gathered from the previous day to reflect the most up to date information on current mortgage rates.

Why do we use LendingTree’s Weekly Mortgage Rate Pulse? LendingTree is one the largest providers of mortgages on the internet who utilizes a large network of lenders that provide a more realistic snapshot of current market rates.

See how your state compares below by comparing mortgage data including a snapshot of the lowest 30-year fixed rates offered by lenders on the LendingTree network, average loan-to-value ratio and percentage of consumers with negative equity:

STATE-BY-STATE MORTGAGE DATA 8/16/11

*Updated Quarterly

STATE

LOWEST MORTGAGE RATE

LOAN-TO-VALUE RATIO*

NEGATIVE EQUITY*

US Average

3.88% (4.02% APR)

69.7%

33.1%

Alabama

3.88% (4.02% APR)

67.4%

27.9%

Alaska

3.88% (4.00% APR)

65.9%

17.6%

Arizona

4.00% (4.14% APR)

93.6%

38.9%

Arkansas

4.00% (4.12% APR)

72.2%

41.7%

California

4.00% (4.15% APR)

70.1%

34.6%

Colorado

3.88% (4.04% APR)

71.8%

21.9%

Connecticut

3.88% (3.99% APR)

59.5%

43.9%

Delaware

3.88% (3.98% APR)

66.4%

37.9%

District of Columbia

3.88% (4.10% APR)

58.7%

26.1%

Florida

3.88% (4.00% APR)

88.8%

39.1%

Georgia

3.88% (4.01% APR)

80.8%

25.7%

Hawaii

4.13% (4.25% APR)

54.0%

26.3%

Idaho

3.88% (4.01% APR)

72.6%

29.5%

Illinois

4.00% (4.13% APR)

72.2%

31.7%

Indiana

4.00% (4.18% APR)

69.3%

27.8%

Iowa

4.38% (4.51% APR)

66.9%

42.1%

Kansas

4.38% (4.51% APR)

70.2%

30.9%

Kentucky

3.88% (4.02% APR)

67.7%

51.9%

Louisiana

4.38% (4.51% APR)

74.7%

79.6%

Maine

4.00% (4.12% APR)

58.4%

29.7%

Maryland

3.88% (4.01% APR)

70.1%

25.5%

Massachusetts

4.00% (4.12% APR)

60.9%

45.4%

Michigan

4.00% (4.14% APR)

84.2%

32.6%

Minnesota

3.88% (3.98% APR)

66.2%

21.8%

Mississippi

4.38% (4.51% APR)

78.5%

29.5%

Missouri

3.88% (4.02% APR)

71.7%

31.0%

Montana

4.38% (4.51% APR)

60.5%

32.5%

Nebraska

4.38% (4.51% APR)

72.7%

44.1%

Nevada

3.88% (4.00% APR)

114.7%

54.0%

New Hampshire

4.00% (4.12% APR)

70.7%

25.4%

New Jersey

3.88% (3.96% APR)

62.3%

29.3%

New Mexico

3.88% (4.02% APR)

67.3%

41.3%

New York

3.88% (3.98% APR)

48.4%

35.1%

North Carolina

3.88% (4.01% APR)

71.1%

32.0%

North Dakota

4.38% (4.51% APR)

60.6%

35.3%

Ohio

4.00% (4.12% APR)

75.4%

27.0%

Oklahoma

4.00% (4.12% APR)

75.5%

53.5%

Oregon

3.88% (4.03% APR)

69.7%

19.5%

Pennsylvania

4.00% (4.12% APR)

60.6%

42.3%

Rhode Island

4.38% (4.51% APR)

62.8%

36.8%

South Carolina

4.00% (4.12% APR)

70.9%

28.1%

South Dakota

4.00% (4.12% APR)

N/A

N/A

Tennessee

4.00% (4.12% APR)

71.3%

29.5%

Texas

3.88% (4.00% APR)

68.4%

30.5%

Utah

3.88% (4.11% APR)

73.3%

22.3%

Vermont

4.38% (4.51% APR)

N/A

N/A

Virginia

3.88% (4.01% APR)

70.8%

24.6%

Washington

3.88% (4.02% APR)

68.0%

21.3%

West Virginia

4.38% (4.51% APR)

66.5%

57.6%

Wisconsin

4.38% (4.51% APR)

68.5%

34.4%

Wyoming

3.88% (4.01% APR)

63.5%

22.7%

Home loan rates above are reflective of actual rates offered to borrowers by lenders on the LendingTree network. Lowest rates shown reflect the payment of one discount point. Rates will vary based on the borrower’s loan details and credit profile.

More information is available here:

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