Mortgage rates down slightly, Freddie Mac says

Mortgage rates have dropped slightly, Freddie Mac's survey of lenders shows, with the average for a 30-year fixed home loan at 3.65 percent, down from 3.67 percent in last week's report.

The average rate for a 15-year fixed mortgage edged down from 2.94 percent to 2.92 percent, and the start rate for a home loan that adjusts annually fell to 2.44 percent from 2.46 percent.

The weekly report, released Thursday, is the fifth in a row to show the benchmark 30-year loan leveled off at less than 3.75 percent, remarkably cheap home financing by historical standards.

The issue for many borrowers has been qualifying for the favorable rates.

Banks generally have kept credit standards tighter than required for loans guaranteed by Freddie Mac and its sister company, Fannie Mae, which have been wards of the government since the financial crisis.

Many borrowers with credit scores under 700 and less than 20 percent down payments instead have turned to loans backed by the Federal Housing Administration.

Such FHA loans require hefty insurance payments, which, unlike the private mortgage insurance sometimes added to Fannie and Freddie loans, cannot be canceled if rising home prices cause the borrower's equity to rise above 20 percent.

Freddie Mac asks lenders early each week about the terms that they are offering to solid borrowers seeking mortgages of up to $417,000 that conform to guidelines for loans guaranteed by Freddie and Fannie.

The borrowers would have paid a little more than half of 1 percent of the loan balance in upfront lender fees and discount points to obtain the rates.

Payments for such services as appraisals and title insurance are not included.

The survey provides a consistent gauge of mortgage trends, but actual rates adjust constantly and are influenced by many factors.

The borrowers' credit histories, income and debt loads affect the rates they may be offered.

Additional factors include whether the borrowers opt for zero-cost loans at higher rates or pay extra to lenders initially to lower the rates.

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