Mortgage rates somehow found room to drop even lower -- down to another record low.
The benchmark 30-year fixed-rate mortgage fell 7 basis points this week, to 4.88 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point.
This was the third time in four weeks the benchmark 30-year rate has set a record low in Bankrate's weekly survey. The old record, set two weeks ago, was 4.92 percent.
Bankrate began conducting the weekly survey in September 1985. According to data from the National Bureau of Economic Research, it appears mortgage rates haven't been this low since the summer of 1956, when "The King and I," starring Yul Brynner, was a hit movie.
The mortgages in this week's survey had an average total of 0.5 discount and origination points. One year ago, the mortgage index was 5.95 percent (more than a percentage point higher); four weeks ago, it was 5.07 percent.
The benchmark 15-year fixed-rate mortgage fell 3 basis points, to 4.33 percent, also a record in the Bankrate survey. The benchmark 5/1 adjustable-rate mortgage fell 5 basis points, to 4.16 percent.
Weekly national mortgage survey
Results of Bankrate.com's June 9, 2010, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:
Bad jobs report, great ratesMortgage rates, already low, stumbled upon the release of the May employment report Friday morning. It showed that the economy added 431,000 jobs in May -- and that 411,000 of those were temporary jobs with the U.S. Census. Hiring managers for private companies practically took the month off. Bond yields fell upon that grim news, and mortgage rates followed.
If you gathered all the people who are qualified and able to refinance their mortgages, and then gathered all the people who already have refinanced their mortgages, the two groups would be almost identical. There are a few people -- not a lot -- who could benefit by refinancing and are able to do so, but haven't.
"Eighty percent of the country has refinanced," says Marc Demetriou, mortgage consultant for Residential Home Funding Corp.'s office in Bloomingdale, N.J.
Most of these home loans have been classic rate-and-term refinancing, but other refis are driven by divorces and the desire to consolidate debts.
Longer lock on refisDemetriou says today's refinancers should ask their lenders: "How many days is it going to take to close the loan, and how many days are you locking me for?"
With luck and string-pulling, Demetriou says he can close a loan in as little as 15 days after application. Most of his customers close within 26 days, he says.
Closing less than a month after application isn't typical right now. With many refinances filling up the mortgage pipeline, most lenders are advising customers to lock their low rates for 45 or 60 days. If the process is glitch-free -- and that's a big "if" -- a wage-earner's refi should be able to close within 45 days, in most cases.
Paul Anastos, president of Mortgage Master, a lender based in Walpole, Mass., has two bits of advice for today's refinancers:
First, "make sure you get the deal that you were promised upfront, when you were talking to the loan officer," he says. Read the disclosures and ask questions if you're confused.
Anastos' second piece of advice: "Be cognizant of the fact that a lot more documentation's required now," he says. Because of the losses that lenders incurred in the housing meltdown, "they're certainly looking for far more supporting documentation than they did in the past."