Thirty-year mortgage rates were up today, while 15-year fixed rates remain unchanged and 5/1 ARM rates dropped by one basis point, according to a NerdWallet survey of mortgage interest rates published by national lenders Monday morning.
MORTGAGE RATES TODAY, monday, FEB. 13
Urban Institute: Borrowers with lower credit ‘giving up’ on homeownership
Many prospective homeowners are giving up on or postponing their dream of buying a home simply because they feel they can’t qualify, according to new research from the Urban Institute. Using 2015 Home Mortgage Disclosure Act data, a research team looked at the denial rate for 2014 and 2015 mortgages and concluded that getting a mortgage today is harder for borrowers with less-than-perfect credit than it was in 2006, before the housing crisis.
“Our ‘real’ denial rate … exposes an important truth behind these numbers: Mortgage denial rates have decreased slightly in recent years only because lower-credit applicants are choosing not to apply for mortgages,” reported the team of Laurie Goodman, Bing Bai and Bhargavi Ganesh in a news release.
“[W]hile the denial rate among lower-credit applicants has moved closer to pre-crisis levels, lower-credit applicants accounted for a lower share of total applicants in 2015 than they did before the crisis (33% versus 49%). Tight credit is discouraging lower-credit-profile applicants from applying,” the researchers said.
While there’s been some minimal improvement in access to credit when applying for a mortgage, the researchers found this is due to credit expansion efforts from the Federal Housing Administration and government-sponsored enterprises (Fannie Mae and Freddie Mac). Also, several nonbank lenders have joined the market since the downturn.
“For all four racial groups we studied, the share of lower-credit applicants is well below pre-crisis levels,” the researchers added. “Tight credit conditions have discouraged consumers with less-than-perfect credit from applying for a loan, and many of these consumers are likely being filtered out in the preapproval process prevalent in today’s market.”
Homeowners looking to lower their mortgage rate can shop for refinance lenders here.
NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.