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Mortgage Rates Wednesday, Aug. 30: Some Loans May Now Be Appraisal-Free

Aug. 30, 2017
Finding the Right Mortgage, Mortgage Rates, Mortgages
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The 30-year fixed-rate mortgage bounced back by four basis points, while the rate on the 5/1 ARM went up by one basis point, according to a NerdWallet survey of daily mortgage rates published by national lenders Wednesday morning. The 15-year fixed was unchanged.

Fixed mortgage rates remain near the lows last seen around the time of the 2016 presidential election.

Current interest rates are quite low by historical standards, and they make it more affordable to buy a home or refinance the loan. A few refinancers and buyers will get mortgages faster and cheaper because they won’t have to get appraisals, according to announcements by Fannie Mae and Freddie Mac this month.

Until this summer, appraisals were required on virtually all home loans that were destined for sale to Fannie Mae or Freddie Mac, the companies that bundle mortgages and sell them to investors. Now Fannie and Freddie have relaxed their appraisal requirements. Waiving the appraisal could save borrowers around $500 and shave seven to 10 days off the time between application and closing, Freddie Mac said in a news release.

Who decides whether an appraisal is necessary? Not the borrower or the lender. The call is made by the underwriting software operated by Fannie and Freddie. The companies say most applications won’t receive an offer to forgo the appraisal. To satisfy investors, most loans still will need an appraisal to establish market value, Fannie Mae said in a fact sheet for lenders.


(Change from 8/29)
30-year fixed: 3.94% APR (+0.04)
15-year fixed: 3.36% APR (NC)
5/1 ARM: 3.85% APR (+0.01)

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.

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