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Delaware Mortgage and Refinance Rates
Current mortgage rates in Delaware
As of Thursday, September 26, 2024, current mortgage interest rates in Delaware are 6.24% for a 30-year fixed mortgage and 5.65% for a 15-year fixed mortgage. That’s a sizable drop compared with the fall of 2023 and a reflection of the Federal Reserve’s decision to start lowering rates.
As interest rates become more manageable, Delaware’s housing prices are also rising at a more traditional pace. The median sales price in August 2024 was $385,483, according to the Delaware Association of Realtors – just a 3.45% increase from one year earlier and lower than the national median price of $416,700. Of the three counties in Delaware, Kent County offers the most affordable median price point of $339,000.
Refinance rates in Delaware
Homeowners who recently purchased their properties in Delaware might want to consider refinancing. Refinance rates are the lowest they’ve been in more than a year. For buyers who had to accept rates of 7% and above, today’s environment can create some sizable savings. Additionally, homeowners who have been in their properties in Delaware for a long time might be in a good position to explore a cash-out refinance to access funds for goals such as home remodeling.
Delaware mortgage rate trends
Delaware mortgage rates have been moving in the same direction as mortgage rates elsewhere across the country: down. Looking ahead, most experts expect rates to continue to decline, but it’s tough to say by how much.
As rates drop, housing supply has been ticking up in Delaware. Available active inventory increased by 34% in August, according to the Delaware Association of Realtors. While it’s still a seller’s market here, more inventory is good news for buyers.
National mortgage rates by loan type
| Product | Interest Rate | APR |
|---|---|---|
| 30-Year Fixed Rate | 6.20% | 6.24% |
| 15-Year Fixed Rate | 5.42% | 5.49% |
| 5-1 ARM | 5.63% | 6.66% |
| 30-Year Fixed Rate FHA | 6.42% | 6.47% |
| 30-Year Fixed Rate VA | 6.51% | 6.55% |
| 30-Year Fixed Rate Jumbo | 6.33% | 6.38% |
Rates as of Thursday, September 26, 2024 at 6:30 AM
Mortgage statistics for Delaware
Delaware claimed the No. 1 spot on Bankrate’s latest best places to retire ranking. Even if you’re still working, the state has a relatively affordable cost of living compared with other neighbors on the East Coast. Here are more statistics:
- Median sales price, August 2024: $385,483
- Average days on market, August 2024: 34
- Most expensive county, August 2024: Sussex ($437,450 median sales price)
- Homeownership rate, Q4 2023: 75.7%
Sources: Delaware Association of Realtors, U.S. Census Bureau
Mortgage options in Delaware
If you’re looking to get a mortgage in Delaware, consider these loan options:
- Delaware conventional mortgages: To qualify for a conventional loan, you’ll need a credit score of at least 620 and a debt-to-income (DTI) ratio of no more than 45%. If you make a down payment of less than 20%, you’ll need to pay for private mortgage insurance (PMI), as well.
- Delaware FHA loans: If your credit history disqualifies you from a conventional loan, you might be eligible for a loan insured by the Federal Housing Administration (FHA). For this type of mortgage, you’ll need a credit score of at least 580 with a 3.5% down payment. As with a conventional loan, if you put down less than 20% on an FHA loan, you’ll be on the hook for mortgage insurance.
- Delaware VA loans: If you’re an eligible veteran or active-duty member of the military, you might qualify for a mortgage backed by the Department of Veterans Affairs (VA). A VA loan doesn’t require a down payment or mortgage insurance, but you do need to pay a funding fee.
- Delaware jumbo loans: If you need to borrow a large pile of cash to purchase a home in Fenwick Island or another high-priced waterfront spot in Delaware, you might need to explore jumbo loans. These loans exceed conforming loan limits and will require a larger down payment of at least 10%, along with good to excellent credit.
First-time homebuyer programs in Delaware
The Delaware State Housing Authority (DSHA) offers programs designed to help first-time homebuyers as well as current homeowners who might want to trade up. The agency’s options include below-market rate mortgages and down payment assistance programs. Here’s an overview:
Welcome Home: First-Time Homebuyer Program
The DSHA offers a few different options geared toward first-time buyers that can be paired with a DSHA 30-year fixed-rate loan. To qualify, you’ll need a credit score of at least 620, and if your score is 659 or below, you’ll need to complete a housing counseling program. Purchase price and income limits vary by household size and location. Smart Start does not include any down payment or closing cost assistance, while the First State Home Loan includes 3% for down payment and closing costs. Diamond in the Rough includes 5% for down payment and closing costs, although you must qualify for the FHA 203k Limited Program first.
The organization has two additional options that can be even more valuable for first-time buyers: Home Sweet Home, which includes a loan for up to $12,000 in down payment and closing cost assistance that is forgivable after 10 years, and Diamonds in the Rough, which is exclusively available for certain professionals such as teachers, first responders, certain hospital employees and state employees. However, the funding is limited. Once it’s gone, these options will no longer be available.
Delaware First-Time Homebuyer Tax Credit
Specifically for first-time homebuyers, the Delaware First-Time Homebuyer Tax Credit allows participants to claim 35% of their annual mortgage interest as a special federal tax credit. The maximum credit allowed is $2,000 — a deduction that directly reduces your annual federal tax bill.
The program is open to any first-time homebuyer, although borrowers who use the Welcome Home programs cannot also use the tax credit. There are program eligibility requirements to keep in mind, however, including household income and purchase price requirements.
How to find the best mortgage rate in Delaware for you
Before you begin shopping around, take these steps:
- Strengthen your credit score: Long before you start looking for a mortgage lender and applying for a loan, give your finances a checkup, and do whatever you can to improve your credit score such as paying down your credit card balances and verifying that there are no errors on your credit report.
- Determine your budget: Get a handle on how much house you can afford. One rule of thumb many buyers use to figure out their price range is the 28/36 rule. Be sure to plan for the unexpected costs of homeownership, too, and set aside a chunk of money for maintenance and repairs.
- Know your mortgage options: There are different types of mortgages, including conventional loans with as little as 3% down and government-backed loans. If you’re in the market for a jumbo loan, check Delaware’s county-by-county loan limits.
- Compare rates and terms from several lenders: Don’t settle on the first lender you talk to. Rate-shop with different lenders — banks, credit unions, online lenders and local independents — to ensure you’re getting the best deal on rates, fees and terms.
- Get preapproved for a mortgage: Get a mortgage preapproval with three or four different lenders. This will help you understand exactly what loan amount you’d qualify for if you were to apply, and prepare you to make offers on homes.
Additional Delaware mortgage resources
Meet our Bankrate experts
Written by: Jeff Ostrowski, Principal Reporter, Mortgages
I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.
Edited by: Suzanne De Vita, Senior Editor, Home Lending
I’ve covered the housing market, mortgages and real estate for the past 12 years. At Bankrate, my areas of focus include first-time homebuyers and mortgage rate trends, and I’m especially interested in the housing needs of baby boomers. In the past, I’ve reported on market indicators like home sales and supply, as well as the real estate brokerage business. My work has been recognized by the National Association of Real Estate Editors.