Global woes send mortgage rates skidding lower

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The travails of Japan and turmoil in the Middle East pushed mortgage rates south again, opening another window for anyone looking to lock in a 30-year loan in the mid-4% range.

Freddie Mac’s widely watched weekly survey of lender offering rates, out Thursday morning, showed the 30-year fixed rate dropping to 4.76% from 4.88% a week earlier, and mortgage pros were spotting even better deals for highly qualified borrowers.

“Fixed rates are back down to 4.5%,” said Laguna Niguel mortgage broker Jeff Lazerson.

The 15-year fixed mortgage, popular with refinancers, dropped from 4.15% to 3.97%, the Freddie Mac survey showed -- its lowest level since December.

Borrowers would have paid lenders an average of 0.7% of the loan amount to obtain the fixed rates, with the option to pay more to lower them further.

For those seeking an even lower rate -- and not planning to stay too long in their homes -- the 5-year hybrid offered an alternative. The typical start rate was 3.57% for the first five years on these loans before they become adjustable annually, according to the Freddie Mac survey.

Freddie Mac asks lenders what rates are available to people with solid credit and at least 20% down payments or 20% equity in their homes if they are refinancing. “Jumbo” mortgages too big to be sold to Freddie Mac and Fannie Mae, which vary by region but are those over $729,750 in Los Angeles and Orange counties, have been running about 0.6 of a percentage point higher.

Concern over fallout from the Japanese catastrophe, not to mention turmoil in the Middle East, has driven investors to the traditional safe haven of U.S. Treasury securities. That in turn drove down the yields, or effective interest rates, on the T-bonds.

Fixed mortgage rates tend to track the 10-year Treasury, whose yield fell from the 3.4% range before the quake, tsunami and nuclear disaster to the 3.2% range Wednesday. The yield on the 10-year note was edging higher again early Thursday as a new report showed U.S. inflation increasing, so the decline in home lending rates may not last.

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--E. Scott Reckard