Mortgage Rates Today, Jan. 6: Sharp Drops; Credit Access Up

Mortgage Rates, Mortgages
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Homebuyers and homeowners looking to refinance will be happy to hear that mortgage rates for 30- and 15-year fixed loans, as well as 5/1 ARMs, all dropped sharply on Friday, according to a NerdWallet survey of mortgage rates published by national lenders this morning. The 5/1 ARM rates saw the biggest dip, followed closely by 30-year fixed mortgage rates.


Mortgage Rates Today,
Friday, January 6

(Change from 1/5/2017)
30-year fixed: 4.31% APR (-0.03)
15-year fixed: 3.73% APR (-0.02)
5/1 ARM: 3.83% APR (-0.04)

MBA: Borrowers gained more access to mortgage credit in December

Loosening credit standards paved the way for increased mortgage credit availability in December, according to a new report from the Mortgage Bankers Association.

The Mortgage Credit Availability Index, or MCAI, is calculated using several factors related to borrower eligibility (such as credit score, loan type and loan-to-value ratio). The MCAI increased overall by 0.6% month-over-month to 175.2 in December, the MBA reported. A decline in the MCAI indicates that lending standards are tightening, while increases in the index point to loosening credit. That’s good news for borrowers who have a solid income and payment history but have been sidelined by stringent requirements to qualify for a mortgage.

The index was benchmarked to 100 in March 2012. The Jumbo MCAI (for nonconforming/jumbo mortgage loans) saw the greatest increase in availability to borrowers in December, up by 1.3%. The Conventional MCAI rose by 0.7%, followed by the Government MCAI (FHA loans and VA loans, for example) at 0.6%, with the Conforming MCAI up by 0.04%.

» MORE: Can you get a mortgage with no credit history?

“Credit availability was up for the fourth consecutive month in December, driven by jumbo loan programs as well as loan programs for borrowers with lower credit scores and low down payments,” Lynn Fisher, MBA’s vice president of research and economics, said in a news release.

In other words, more potential borrowers who might not have pristine credit scores or much cash for a down payment are gaining access to mortgage credit they wouldn’t have had since lending standards became more stringent in response to the housing downturn about 10 years ago.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

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Deborah Kearns is a staff writer at NerdWallet, a personal finance website. Email: dkearns@nerdwallet.com. Twitter: @debbie_kearns.