Rates continue to inch upward
Mortgage rates have been getting higher over the past few weeks, but they’re still low overall. Mortgage rates tend to be low when the economy is struggling, and the coronavirus pandemic has hurt the US economy. The Federal Reserve has been aggressively purchasing assets, including mortgage-backed securities, to help the economy.
But the Fed recently announced that it will start tapering purchasing at twice the rate it initially planned. It also plans to increase the federal funds rate three times in 2022. Rates are rising as a result, and they’ll probably continue to gradually increase through 2022.
Today’s mortgage and refinance rates
Today’s mortgage rates
Today’s refinance rates
Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments:
By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.
How do mortgage rates work?
A mortgage interest rate is the fee a lender charges for borrowing money, expressed as a percentage. For example, you get a mortgage for $300,000 with an interest rate of 2.5%.
Mortgage rates can be either fixed or adjustable. A fixed-rate mortgage keeps your rate the same for the entire length of your loan. An adjustable-rate mortgage locks in your rate for the first few years or so, then changes it periodically. With a 7/1 ARM, your rate would stay steady for the first seven years, then shift annually.
The longer your mortgage term, the higher your rate will be. For instance, you’ll pay more on a 30-year mortgage than a 15-year mortgage. Longer terms do come with lower monthly payments, though, because you’re spreading out the repayment process.
How do I get the best mortgage rate?
Here are a few steps you can take to get the lowest mortgage rate possible:
Consider fixed vs. adjustable rates. You may be able to get a lower introductory rate with an adjustable-rate mortgage, which can be good if you plan to move before the intro period ends. But a fixed rate could be better if you’re buying a forever home because you won’t risk your rate going up later. Look at the rates your lender offers and weigh your options.
Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to boost your credit score or lower your debt-to-income ratio, if necessary. Saving for a higher down payment also helps.
Choose the right lender. Each lender charges different mortgage rates. Picking the right one for your financial situation will help you land a good rate.
How do I choose a mortgage lender?
First, think about what type of mortgage you want. The best mortgage lender will be different for an FHA mortgage than for a VA …read more
Source:: Business Insider