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LendingTree releases monthly mortgage offer report for November

LendingTree has released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.

November’s best offers for borrowers with the best profiles had an average APR of 3.75 percent for conforming 30-year fixed purchase loans, unchanged from October. Refinance loan offers were down 1 bps to 3.69 percent. Mortgage rates vary dependent upon parameters including credit score, loan-to-value, income and property type.

For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were down 1 bps to 4.30 percent, the lowest since November 2016. In contrast, the loan note rate of 4.18 percent was unchanged from October when it reached the highest since July. We prefer to use the APR as lenders often make changes to other fees in response to changing interest rates.

Consumers with the highest credit scores (760+) saw offered APRs of 4.16 percent in November, vs 4.43 percent for consumers with scores of 680-719. The APR spread of 27 bps between these score ranges was 5 bps wider than in October and the widest since July 2016. The spread represents nearly $13,400 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $233,127. The additional costs are due to higher interest rates, larger fees or a combination of the two.

Refinance APRs for conforming 30-yr fixed loans were down 2 bps to 4.24 percent. The credit score bracket spread widened to 19 from 16 bps, amounting to $9,500 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $235,973.

Average proposed purchase down payments have been rising for 8 months and reached $62,409.

“Our report shows that the benefits of improving your credit score go beyond lower interest rates and include access to higher loans amounts and higher LTVs,” said Tendayi Kapfidze, LendingTree’s Chief Economist and report author. “This allows a home buyer to be more competitive in a marketplace with limited inventory and heightened competition among buyers.”

Kapfidze added, “We expect rate volatility to increase throughout the month of December. The passage of the Senate version of Republican tax plan has only minimally affected rates, but a larger catalyst for mortgage rates this month may be the expected increase in the benchmark interest rate by the FOMC on December 13. Another factor to consider is the potential for a government shutdown, which is contingent upon Congress coming to a spending plan agreement before December 8. If there are no compromises made from either party and government workers are forced into unpaid furlough, lenders may experience some difficulty in verifying tax records and borrowers could see delays in FHA and VA loan processing until a spending plan is put in place. The last shutdown in 2013 saw near-term declines of 7 percent in FHA/VA mortgage applications and 4 percent in conventional applications, according to the Mortgage Bankers Association. Regardless of what happens with the Fed or the spending plan, consumers have a small window of opportunity to take advantage of today’s rates.”

The LendingTree Mortgage Offers Report contains data from actual loan terms offered to borrowers on LendingTree.com by lenders. We believe it is an important addition to standard industry surveys and reports on mortgage rates. Most quoted industry rates are for a hypothetical borrower with prime credit who makes a 20 percent down payment. Most borrowers do not fit this profile. Our report includes the average quoted APR by credit score, together with the average down payment and other metrics described below. We stratify by credit score, so borrowers have added information on how their credit profile affects their loan prospects. The report covers conforming 30-yr fixed loans for both purchase and refinance.

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