Build equity fast with a 15-year loan at just 2.875%
AimLoan is offering one of autumn's best nationally available deals on a 15-year, fixed-rate home loan.
It's charging just 2.875% with no points and around $1,995 in lender fees (fees for this deal vary by state and scenario). There's also a 30-day rate lock.
That's nearly two-fifths of a percentage point lower than the current national average on a 15 year home loan — 3.27%, according to our latest survey of major lenders.
That rate's also a little lower than what you would have paid for one of our favorite deals in August, when LenderFi was offering 3% on a 15-year with no points and around $1,335 in fees.
This loan is available in 49 states — Nevada is the only exception — and the District of Columbia.
Can you find a better deal where you live? Click here to compare this deal with the best mortgage rates from scores of other lenders in your area.
Shorter-term loans are particularly popular with borrowers out to refinance their homes and save tens of thousands of dollars in interest by paying off the mortgage more quickly.
See how much interest you'd save by paying off your home loan early using our 15-year vs. 30-year mortgage comparison calculator.
The biggest drawback to short-term loans is that the monthly payments are higher. For this loan, the principal and interest payment would be $685 a month for every $100,000 borrowed.
You can use our mortgage calculator to determine the monthly payments for the amount you want to borrow with this or any home loan.
It will also provide a month-by-month amortization schedule that shows how much you've reduced your debt and how much you still owe if you want to pay off the loan.
AimLoan (www.aimloan.com) is headquartered in San Diego, California, and gets a B- rating from the Better Business Bureau.
That's a little lower than we typically like to see, and online comments criticize the lender for repeatedly seeking more documentation and pushing, or missing, closing deadlines.
"If you go with Aim your loan will not close on time and you will be STRESSED," wrote one borrower on Credit Karma, a free Web-based credit and financial management service.
Yet other customers are completely satisfied. "No hassle and nothing unexplained. Everything is laid out clearly and honestly. Impressive response time and follow through," another borrower wrote on Credit Karma.
This deal is a "special," and AimLoan says it's helpful for applicants to let them know they found the deal on a Bankrate website. To qualify you must:
- Be applying for a loan under $417,000.
- Have a credit score of at least 740.
- Have at least a 20% down payment if you're purchasing.
- Have at least 20% equity in your home if you are refinancing.
- Pay your property taxes and homeowners insurance through an escrow account.
Mortgage rates are around a quarter of a percentage point lower than they were at this time last year and have defied all expectations that they would get more expensive this year. In fact, they've actually gotten cheaper since the first of the year.
Home loans were expected to become more expensive this year because the Federal Reserve has ended its campaign to drive long-term interest rates, including mortgage rates, to record lows.
In September 2012, the government-controlled bank started buying up $85 billion of debt per month, split between Treasury bills and bonds backed by home loans.
By flooding the mortgage market with money, it pushed the cost of home loans to record lows in an attempt to boost real estate sales and property values battered by the recession.
With the economy on the mend, the Fed began reducing those purchases this year, buying only $75 billion in January, $65 billion in February and March, $55 billion in April, $45 billion in May, $35 billion in June and July, $25 billion in August and September and a final $15 billion in October.
So why are mortgage rates defying all expectations?
The major reason is that the demand for mortgages — and the money behind them — has truly cratered.
Millions of homeowners leapt at cheaper mortgages when interest rates were falling, and now the boom is over.
Refinancings are down about 60% this year, according to the Mortgage Bankers Association.
And home sales are flat as well. The association expects the number of mortgage originations for purchases to actually fall by 10% this year.
Lenders only issued 226,000 mortgages for one- to four-family dwellings during the first three months of the year — the fewest since the second quarter of 1997.
The market picked up in the second quarter, rebounding to 267,000 loans, but that is still less than half the number written in April, May and June of 2013.
All of this has made the Fed's withdrawal from the mortgage market more or less irrelevant. The money it's been providing simply isn’t needed to fund the relatively few new loans being written.