United Wholesale Mortgage announced Tuesday that it is rolling out a lending program that offers lenders mortgage rates as low as 1.99% for both purchases and refinances.
The rate is only available through independent mortgage brokers, the company said in a statement.
On July 31, the company announced a rate of 1.875% for 15-year mortgages. We dive deeper into requirements to get that rate and other lenders offering similar rates in the story: Make sense of ultra-low mortgage rates.
The UWM 30-year rate is almost a full percentage point below the 2.88% average US mortgage rate for last week, as measured by Freddie Mac, the lowest in a data series dating back nearly five decades.
Mortgage rates have been tumbled since March when the Federal Reserve began buying bonds to support the economy during the COVID-19 pandemic. The Freddie Mac average rate, the oldest measure of mortgage data, has hit record lows eight times this year.
The Fed began purchasing treasury and mortgage-backed securities to curb the credit crunch and prevent a recurrence of the credit crunch that was seen during the 2008 financial crisis.
“I never thought I would start a rate with a 1, but I also never thought I would see a global pandemic, and that’s what it took,” said Matt Rasetta, who owns the New England Superior Rate Mortgage .
“It means mortgage lenders like me will make a lot of money because so many people will refinance, but it’s the silver lining of a not too big situation for the rest of the world,” Rasetta said.
Low mortgage rates such as those offered by UWM have boosted the demand for real estate and supported house prices during the recession caused by the COVID-19 pandemic.
Sales of existing US homes rose 21% in June, the largest monthly profit on record, and the median price rose 3.5% from a year ago, the National Association of Realtors said in a July 22 report.
Creditors qualify applicants by the amount of the monthly payment measured against their income, and as financing costs decrease, the payment shrinks. This also means that lenders often find that they are eligible for larger mortgages, which means they can pay more for a mortgage they want.
While details about the 1.99% program are limited, when UWM announced that it was offering 15-year fixed rates as low as 1,875%, it outlined conditions, including a FICO score of at least 640. Payments and loans are also included. with high balance not eligible and the product is only for property occupied properties, according to a mortgage broker who refused to identify.
(Editor’s note: Story will be updated with comments in the seventh paragraph.)
