Mortgage Rates in 2013: Will They Go Up, Down, or Hold Steady?

Mortgage Rates in 2013-Will They Go Up, Down, or Hold Steady-150x150The home-buying season has arrived and the 2013 real estate market seems to be moving a little faster, while mortgage rates are still lower than ever. You might be wondering if mortgage rates are going to hold steady, increase, or decrease, considering the fact that they have gone up since the historic lows recorded last year.

While the economic growth seemed to slow down considerably at the end of 2012, it looks like it came back on the right track at the beginning of this year. In an economy that is fueled by consumer spending, people keeping their job is of the utmost importance, so the recent layoffs decrease has helped significantly as well. The real estate market has contributed to the economic recovery also. Existing home sales have gone up as well as new home construction, but the inventories are fairly low because the construction industry is also in recovery.

What Influences Mortgage Rates?

Back in November of 2012, mortgage rates were 3.31% for a 30-year fixed-rate mortgage and have increased to 3.51% by February 2013. Even with the slight increase, mortgage rates are still close to record lows, and actually lower than they were at this time last year.

One of the main factors that influence mortgage rates is the housing market recovery, which has suffered significantly due to the economic crisis of 2008. Home sales are rising, but the inventories are getting lower, which will drive home prices up. Builders are also slowly recovering, so more and more new homes will become available.  All of these contribute to the appreciation of the housing market.

The United States economy, which is seeing slow recovery, has the most influence on the housing market. After the recent recession, economists expected a 3 to 5 percent growth in Gross Domestic Product (GDP), but the United States is only experiencing a 2 percent growth. The recovery is slow but steady and will lead to a stronger housing market.

Will Mortgage Rates Go Up or Down in 2013?

Excluding another major crisis, a new war, or the further deterioration of the European economy, it is safe to say that the mortgage rates will slowly rise in 2013. The economic increase will lead to an increase in corporate profits, which will positively influence confidence among consumers and potential home buyers. As a result, the demand for stocks will increase, the demand for bonds will decrease, and mortgage rates will go up.

The mortgage rates will most likely remain under 4 percent for 2013, but gain up to 0.5 percent by the end of the year. If the economy continues to grow, you should expect higher mortgage rates in the future, but if there is a new financial or political crisis, the rates will go down to what they were in 2012, and possibly even lower.

Mortgage Rates Forecast Vs. Home Mortgage Rates Today

Mortgage Rates Forecast Vs. Home Mortgage Rates Today- 150x150Today’s home mortgage rates are very close to the record lows registered at the end of last year. They have been slowly increasing since then, and there are signs that they will keep increasing. With this in mind, you are probably wondering if you should buy a home now or wait longer. Increasing rates are always bad news for people who wish to become home owners, but mortgage professionals don’t think that rates will rise unexpectedly just yet.

Mortgage rates have been slowly increasing and decreasing since the start of the year, and most analysts don’t think that we will see any major changes in the near future, but they expect a slight increase this year. The recovering economy seems to be slowly growing and there is an increase in job growth, both of these giving confidence to investors and home buyers, so the rates will most likely start going up.

Home Mortgage Rates Today

With current mortgage rates near all-time lows, an increase in home sales and refinances has been recorded this year. The economy, which has the largest influence over mortgage rates, is experiencing more and more growth and, unless a new crisis arises, it will keep growing in the following years. So 2013 might be the last year when mortgage rates will be close to record lows, meaning that acting now might save you money.

Securing a low interest rate on your mortgage means that you will pay less overall for your loan. The current rate for a 30-year fixed-rate mortgage loan is 3.6 percent, while the rate for a 15-year fixed-rate loan is 2.80. Not the lowest they have ever been, but pretty close, and they might not stay in this range in the near future. Rates have been steadily increasing since last November, but are still considered low, so today’s low mortgage rates might be the perfect opportunity for you to become a home owner.

Mortgage Rates Forecast

Like most home buyers, you are probably looking towards the future, and not the past. Low mortgage rates might be a thing of the past, but, according to specialists, they won’t increase significantly and surprisingly in the next months.

The Federal Reserve’s recent actions have kept mortgage rates at a low level. The government has been purchasing mortgages from the lenders, allowing them to lend more money to borrowers, while keeping mortgage rates low. But the government’s help won’t last indefinitely, and the mortgage rates will start to increase more significantly.

The mortgage rates are expected to go above 4 percent by the end of this year, and probably over 4.5 percent by the end of 2014. While this might not seem like a lot, especially for a first time home buyer, the difference will add up over time, and the 1 percent difference in current and future rates will actually mean that you will be paying thousands more on your mortgage loan.

As long as no major events happen in the United States or internationally, like a new war or a major event in the financial world, the mortgage rates will most likely continue their upward trend, at least for the near future. As the economy continues its growth, the mortgage rates will be affected by it, but it looks like it will only be a slow, but steady, increase for the next couple of years.

If you are planning on buying a home, this might be the perfect time to start looking. Not only are the mortgage rates expected to grow, but other costs associated with mortgage loans will experience an increase in the near future. Mortgage rates might still seem fairly low at the expected 4 percent by the end of 2013, but every small increase means more money out of your own pocket, and a more expensive and harder to repay mortgage loan. So, if you think you have done all the research and have a full understanding of what buying a home entails, purchasing a home at today’s mortgage rates is probably a better idea than waiting a few more months or years.

10, 20, 25, 40, 50: The Mortgage Loan Term Options You Don’t Always Hear About

Mortgage Loan Term Options You Don't Always Hear About- 150x150Probably the most important aspect of a mortgage is its term, or the number of years that will be needed for you to repay the loan. The mortgage loan term is very important to a home buyer, as it will influence the amount that you will have to put down as a down payment, your monthly payment, and the interest rate that you are going to receive from your lender. Of course, choosing between a short and a long term mortgage loan will be determined by your budget, financial situation and plans for the future.

The most common are the 15 and the 30-year mortgage loans. But you should know that there are many other mortgage loan options out there, such as the loans that can be repaid in 10, 20, 25, 40, or 50 years.

[Compare the latest mortgage rates from dozens of lenders, updated daily.]

Things to Consider Before Deciding Which Term to Choose

Of course, what may be the right choice, in regards to mortgage loan terms, for someone won’t be the same for you. The most important factor in determining which term is your best choice will be your financial situation. So, before even starting to shop around for a mortgage loan, you should take a close look at your budget. Here are some other important factors that should help you decide what type of loan term, short or long, you should go with:

  • The monthly payment. Because it extends over a longer period of time, longer-term mortgage loans will result in a lower monthly payment. This can make your life much easier, but, over time, you will pay more than on a short-term loan.
  • The interest rate. Short-term mortgage loans feature lower interest rates than long-term mortgage loans. In addition to that, the longer the term, the more interest you will pay over time, which will drive the overall cost of the loan much higher than of a short-term loan.
  • Your future plans. If you plan on moving a few years after taking out a mortgage loan, then the savings that you would make by paying a smaller interest rate on a short-term loan might not be too valuable for you, and a longer-term loan with a smaller monthly payment might be a better choice.

Five Uncommon Mortgage Loan Term Options

When thinking about a mortgage loan, most people automatically assume their only choices are 15-year mortgage loans and 30-year mortgage loans. Because there are so many potential home owners with different financial situations, a few other mortgage loan term options have become available over time. Let’s take a look at some of them:

  • The 10-year mortgage loan. This type of mortgage loan is tailored mostly for people with high income, who don’t mind making a much higher monthly payment, while saving money in interest. Taking out a 10-year mortgage loan is a smart move that will possibly save you a lot of money over time, but it’s also the riskiest, because 10 years is still a long time, in which a lot can happen to you financially.
  • The 20 and 25-year mortgage loans. Great for people who don’t have the available budget to make the monthly payment on a more traditional 15-year mortgage loan, or don’t want to make a monthly payment for the next 30 years, with a 30-year mortgage loan. These mortgage loans are also great for refinancing. With current mortgage rates low right now, refinancing a 30-year loan into a 20 or a 25-year loan can result in a slightly larger, or even the same monthly payment as before, but with a few years less to pay.
  • The 40-year mortgage loan. With a longer period of repayment than the traditional 30-year loan, this type of mortgage loan features a smaller monthly payment, allowing you to buy a more expensive home. Unfortunately, the 40-year loan comes with a larger interest rate, which will increase the cost of the loan over time.
  • The 50-year mortgage loan. This type of loan features the lowest monthly payment of all types of loans, so it is attractive to people with lower incomes. Considering the fact that half of all first time home buyers in the United States are around 30 years old, individuals who choose a 50-year mortgage loan will only pay off their home when they are 80 years old. In addition, the interest will be higher than on a 30 or 40-year mortgage loan, and equity will build extremely slowly.

The mortgage loans described in this article may not be so popular, but they sure have their place. It ultimately depends on each individual’s budget and plans, so you should take them into consideration, whether you are a first time home buyer, or you are looking for mortgage refinancing options.

Top Ten Steps to an Affordable Mortgage for Single Moms

Ten Steps to an Affordable Mortgage for Single Moms- 150x150The Federal Housing Authority (FHA) offers numerous opportunities that are advantageous for single moms. Statistics indicate that slightly less than 35% of the total number of homes in the US are occupied by single parents. Only 40% of those belong to single moms with very low income levels. A single parent caries the burden of many expenses to keep up with the high cost of living in this country, so having access to an affordable mortgage is imperative.

Benefits of Seeking a Mortgage as a Single Mom

  • Low monthly repayments. Unlike couples, a single mom has sole responsibility for finances. Being a single mom, you have options to obtain an affordable mortgage loan. Some programs can help you budget for mortgage repayments by taking out a portion or all of the payment directly from your paycheck.
  • Access to a variety of mortgage programs. There are many governmental and nongovernmental organizations that provide housing help to single moms. They build quality houses for single moms that come with affordable monthly mortgage payments, which gives easier access to gaining full equity on the home.
  • Access to bad credit mortgages. While couples can add up both incomes in order to qualify for a mortgage, a single mom has just her own to rely on. Many mortgagors have made it easier for single moms to qualify for mortgages by allowing mortgages for bad credit. This means that even with a low credit score, a single mom can still qualify for a mortgage.
  • Flexible refinancing solutions. Many mortgage loans for single moms have a refinancing option attached to them. This feature is meant to keep the single mom up to date with any changes taking place in their loan. Their credit rating actually improves over time through this plan. Such refinancing solutions protect against repayment default.

Steps to an Affordable Mortgage

  1. Check your credit score. Before you embark on the finer details of obtaining a mortgage, look at your credit report. Having a score above 700 is ideal- even having a score of 698 will raise your interest rate by a third of one percent, translating to a significant amount of extra money spent in the long run. The higher the credit score, the lower the interest rate, which means easier access to a mortgage.
  2. Weigh the advantages and disadvantages. As noted before, single moms have many expenses, including food, medical, and transportation. Before deciding to move ahead with the mortgage loan process, you should look at the pros and cons carefully. Analyze your budget and other monthly payments to see if you can manage a house payment.
  3. Check the qualification requirements. This is a rigorous process. You need to visit a number of lenders and find out their individual loan requirements. Check current mortgage rates, processing times and the amount of funding that you can qualify for. Some options for single moms include HUD loans, FHA loans, subprime loans, seller financing and rent-to-own. After doing this, you will know which lender will give the most funding paired with the lowest possible interest rate and down payment.
  4. Seek financial advice. If you are not financially savvy, you should consider seeking the advice of a financial adviser. They will provide you with information on the different types of mortgage loans, helpful programs, and other requirements that match your current needs with your financial situation. The financial adviser can easily predict how much you are likely to qualify for given your income, expenses, and credit score.
  5. Prepare all required documents. Among the documents that your lender will require includes your driver’s license, a utility bill and your social security number in order to authenticate your application. The lender will also require documents indicating your income, IRS tax returns, a recent bank statement and a letter from your current employer.
  6. Apply for the mortgage. A mortgage takes about 1 to 3 months to process. However, the processing period could be shortened if you provide all of the required documents in a timely manner. In other cases, you may qualify for a lower amount than the estimate you had from the financial adviser. If you find out these details in advance, then you will have more time to seek a subsidy or other mortgage program for single moms.
  7. Hunt for the right house. As the lender continues to process the loan, start hunting for the right house that fits your tentative budget determined during the loan pre-qualification stage. Among the factors you should consider when choosing a home is the cost of insurance, the location, price, taxes, maintenance and repairs.
  8. Close the deal. As simple as it sounds, this is a very tricky stage in mortgage processing. The closing costs include the agent’s fees, appraisal fees, processing fee and the lawyers. Add up all of these costs and find out whether or not you can manage to make the down payment. While the interest rate may be low, these costs can be high. You should calculate and select the option with the lowest total cost.
  9. Make the down payment. If the lender gives you the go ahead, you should make the down payment within the stipulated time period. In most cases, the down payment is 3.5% (excluding the closing costs). You should also have extra money set aside to take care of additional costs such as transportation, mortgage loan documentation and moving costs.
  10. Move in to your house. Once the mortgage has been approved and the down payment has been made, the lender will grant access to your home. Take care of your investment so that your home maintains or even increases in value. As you make monthly payments over the years, your home equity will keep rising.

Mortgage lenders may reject some applications for various reasons, from having too low of income to having too low of a credit score. If you were denied, there are still options, so check alternatives offered by HUD and the FHA.

Deciding Between Fixed-Rate FHA or Adjustable-Rate FHA

FHA- fixed and adjustable- 150x150There are many good reasons why you should choose a mortgage loan insured by the Federal Housing Administration over a conventional loan. The FHA has been helping people buy homes since 1934 and it’s a great alternative to other lending options for families who want to buy their first home, people who have less than perfect credit score, or someone who doesn’t have a large amount of money to use as a down payment. FHA mortgage loans can be obtained with a credit score as low as 500, and by making a minimum of 3.5 percent down payment. However, you should remember that FHA loans come with a fairly large disadvantage. You will be required to pay mortgage insurance for at least 5 years.

Once you have taken into consideration all of the advantages and disadvantages of a Federal Housing Administration backed mortgage loan, and decided that this type of loan is your best choice, it is time to decide between a fixed-rate FHA loan and an adjustable-rate FHA loan.

The Fixed-Rate FHA Loan

The fixed-rate mortgage loan is the most popular type of FHA loan. Also known as the 203(b) mortgage loan insurance program, the fixed-rate FHA loan is a very good choice for first time home buyers. Some very important advantages that the fixed-rate FHA mortgage loan has are:

  • The interest rate remains the same for the duration of the loan. If you are comfortable with the interest rate that you received from the lender, then the fixed-rate FHA mortgage loan will give you peace of mind for the years to come.
  • The fixed-rate FHA loan allows financing for up to 96.5 percent of the loan amount. As a result of this, you will be able to make a low down payment, and your total closing costs will also be low.
  • This is the only type of loan that allows 100 percent of the closing costs to be a gift from family, or funding from a government agency or a non-profit organization. Many of the closing cost charges can be financed, as opposed to conventional loans, where the borrower must pay 2-3 percent of the loan amount at the time of purchase.
  • It’s easy to qualify for a fixed-rate FHA loan. If you have a low credit score, a bad credit history, your debt-to-income ratio is high, or if you have a bankruptcy that is more than 2 years old.

The Adjustable-Rate FHA Loan

Designed for people or families with low and moderate income, the adjustable-rate FHA mortgage loan (ARM) is a type of loan that features low initial costs. If interest rates are high, the adjustable-rate loan will keep the initial interest rate on your mortgage low, so you can qualify for the financing that you need. While, with this kind of loan, there is always the risk that the interest rates will increase, here are a few advantages that you should take into consideration before deciding:

  • The interest rate may rise over the duration of the loan, but it may also decrease. Also, the interest rate cannot fluctuate more than 1 percent per year, and cannot increase by more than 5 percent of the initial rate.
  • 25-day notice for increased interest rate. In case the interest rate on your adjustable-rate FHA mortgage loan increases, you will have to be notified at least 25 days before.
  • Many of the closing costs can be rolled into the cost of the mortgage. This will therefore reduce the initial expense that will be involved in purchasing a home.
  • Option of refinancing. You have the option of refinancing your adjustable-rate FHA loan to a fixed-rate FHA loan at any time through FHA’s streamline refinance program.

Both fixed-rate FHA loans and adjustable-rate FHA loans have their advantages, but choosing one over the other depends entirely on your situation. Understanding all the requirements, advantages and disadvantages is very important when considering any type of FHA loan.

FHA Loan vs. Conventional Loan

FHA vs. Conventional- 150x150In terms of monthly payments, some conventional loans seem very similar to FHA loans, variables such as qualification requirements, mortgage insurance, down payment, or closing costs can make a big difference when choosing between the two types of loans. In recent years, because of low down payments and credit score requirements, Federal Housing Administration (FHA) loans have increased in popularity. Which option is right for you depends entirely on your particular financial situation. Both FHA and conventional loans have their advantages and drawbacks.


Put Down 3.5% on Your New Home.

FHA Loan – Pros and Cons

An FHA loan is a type of loan that is insured by the Federal Housing Administration. For many years, this type of mortgage loan has allowed Americans with a lower income to borrow money for the purchase of a home. An FHA loan has a few clear advantages over a conventional loan. Here are the most important ones:

  • Easier to qualify for a loan. As opposed to a conventional loan, requirements for an FHA loan are not as strict. People with low incomes and low credit scores have a much better chance of qualifying for an FHA loan. You can qualify for an FHA loan even if your credit score is as low as 500.
  • Lower down payment. FHA mortgage loans are very appealing to borrowers because the minimum down payment is only 3.5 percent. With down payments for conventional mortgage loans usually in the 10 to 20 percent range, an FHA loan becomes a great choice if you don’t have a lot of savings to make a bigger down payment.
  • Lower interest rate. Because the loan is backed by the government through the Federal Housing Administration, you could qualify for a lower interest rate than you would on a conventional loan. This could save you thousands of dollars over time.

This all sounds good, but FHA loans have a few disadvantages as well and are not designed to replace conventional mortgage loans. The most important ones are:

  • Mortgage insurance. If you choose an FHA loan, you will have to pay a minimum of 1.5 percent upfront mortgage insurance premium and a 0.5 percent monthly insurance. The mortgage insurance must be paid for a minimum of 5 years, and that will increase the overall cost of the loan.
  • Lower credit scores mean higher down payment. The minimum down payment amount may be as low as 3.5 percent, but only someone with a minimum credit score of 580 can qualify for that low amount. If you have a credit score between the minimum allowed for 500 and 579, you will have to make a 10 percent down payment.
  • Longer to process. Because the Federal Housing Administration mortgage loan is insured by the government, processing the loan will most likely take longer than with a conventional loan.

Conventional Loan – Pros and Cons

A conventional loan is a type of mortgage loan that is not insured or guaranteed by the government. Conventional loans are typically obtained from a financial institution, such as a bank or credit union. This type of loan can be a great choice for you, depending on your budget and situation. Here are some of the advantages of a conventional loan:

  • Better terms for people with good credit scores. A credit score minimum of 620 is required by the National Association of Mortgage Brokers in order to qualify for a mortgage loan. If your credit score is higher than 760, you will qualify for the best rates available, meaning that you will save a lot of money compared to someone with a less than perfect score.
  • No upfront mortgage insurance premium. Unlike with an F HA loan, you won’t have to pay a mortgage insurance premium, which can be as high as 2.25 percent of the total loan amount.
  • More flexible terms. With a conventional mortgage loan, you will have more repayment period term options than with an FHA loan. This can also help you save money, as interest rates will be lower if you choose a faster term, such as a 10 or 15 year repayment period.

Conventional loans can be a great option for someone who meets certain requirements, but they can also become very costly unless you exercise caution when choosing a loan type. Some of the drawbacks of conventional loans are:

  • Harder to qualify. Unless you have a really high or perfect score, the lender will either give you high interest rates and fees, which will increase the cost of the loan, or will even deny your loan application.
  • Higher down payment. The minimum down payment amount for a conventional mortgage loan may be as low as 5 percent with some lenders, but only if strict requirements are met. Typically, the down payment for a conventional loan is between 10 and 20 percent.
  • Private mortgage insurance. Borrowers who made a down payment of less than 20 percent of the total loan amount will be required to pay private mortgage ,insurance which will protect lenders in case of a default.

The conclusion is this: if you are looking for a mortgage loan that requires a low down payment and your credit score is less than good, then you should choose an FHA mortgage loan. If your credit score is perfect or close to perfect and you can afford a larger down payment, the best choice for you is a conventional loan. Before deciding what type of loan to choose, you should always educate yourself and never be afraid to shop around until you find the best type of program that suits you.

Using Mortgage Interest Rates Forecast to Your Advantage

Mortgage Interest Rates ForecastMortgage interest rates predictions for 2013 say that, while the mortgage rates will remain low throughout the year, they will be higher at the end of 2013 than at the beginning of 2013. The same mortgage interest rates forecast was made for the last two years, as well, but it turned out to be wrong. Mortgage rates kept dropping and they are near historic lows right now, so it’s hard to see them dropping even further. For now, the Federal Reserve is doing its best to keep mortgage rates low by buying billions worth of Treasuries and mortgage-backed securities.

Some predictions say that the mortgage interest rates will be around 3.8 percent by the end of the year, while others say that they will grow up to 4.4 percent. Most predictions agree that the rates will remain below 4% during the first half of 2013, but, if the unemployment rate falls to 6.5 percent, the Federal Reserve will decide to stop buying bonds, which will cause the mortgage interest rates to grow.

Should You Trust the Mortgage Interest Rates Forecasts?

Mortgage interest rates are hard to predict. Some people use historical data to come up with a forecast, carefully analyzing previous interest rates trends. Others look at the current economic climate or any upcoming major changes that may have something to do with mortgage rates, while others make predictions based on instinct.

Mortgage rates can never be predicted in absolute terms. It is entirely up to you whether you believe a mortgage interest rates forecast or not, but the most important thing is to understand that these predictions can give you a ballpark figure as to where mortgage loan rates are going.

Just by looking at mortgage interest charts for the past few months, you could get a general idea of the direction in which mortgage rates are going. Mortgage interest rates don’t fluctuate dramatically and most people pay attention to even the smallest interest rate fluctuation. Because mortgage loans extend over long periods of time, even the smallest drop could save money over time.

Predictions made by a bank representative should be taken with a grain of salt, as the bank employee’s job is to convince you to borrow money from them. You also shouldn’t trust alarmist ads in newspapers or on TV. Those types of ads are designed only to get you to borrow money.

Tips to Help with Your Mortgage Decisions

Tips to Help with Your Mortgage DecisionsBuying a house or refinancing a mortgage is a decision that involves several factors, not just mortgage interest rates. Your credit score and your financial situation also influence how much you’re going to pay and if it’s really the time to be taking this step. Here are a few tips that will help with your mortgage decisions in 2013:

 

  • Mortgage interest rates are low right now, so, if your financial situation is in order, it might be the time to take out a mortgage loan. Also, if you haven’t refinanced lately, you’re probably paying a higher interest rate than if you would refinance right now.
  • Make sure you have a good credit score. Having a credit score of over 720 is perfect for taking out a loan and receiving the best interest rates.
  • Shop around. Even if mortgage loan rates are very low right now, you should get quotes from several lenders and carefully compare them.

In conclusion, using a mortgage interest rates forecast is ultimately up to you. Most interest rates predictions are available to everyone, but always pay extra attention to the source of these predictions. These forecasts are nothing more than guesses, so they shouldn’t be the only factor in deciding whether to take out a mortgage loan or not.

How to Find the Best Refinance Mortgage Rates

Best Refinance Mortgage RatesWith mortgage interest rates at near all-time lows, now could be the perfect time for you to consider refinancing your mortgage. Unfortunately, even if most factors point towards an increase in mortgage refinancing, low appraisals and strict lending rules make it difficult for borrowers to refinance, even with good credit scores and significant assets.

Low interest rates have always been attractive to borrowers. The average interest rate on a 30-year mortgage is under 4 percent right now, at the lowest level in the past 60 years. Before refinancing, you must be aware that a low rate is not the only factor that will decide if you will save money. Low mortgage rates usually come with bigger closing costs, and adjustable-rate mortgages come with a low initial rate that can increase a lot over time.

Tips on Getting the Best Rates

While predicting mortgage refinance rates is difficult, you can take a few steps to make sure that you’re receiving the lowest refinance rates available:

  • Boost your credit score. The first thing that you need to do before refinancing is to try to increase your credit score. You’re entitled to one free credit score report per year. Always make sure that all the information in the report is accurate, and correct it if it’s not, by contacting the issuing agency. A credit score of 740 and above is generally perfect for getting the best refinance rates.
  • Shop for the best mortgage lenders. It’s more convenient to just refinance with your bank, but only by shopping around you will be able to find the best refinance mortgage rates. The difference between the best and the worst rate can be as high as 1 percent. When looking for quotes, try bankers, mortgage brokers, credit unions, local and national lenders, and make sure you keep an eye on mortgage rates comparison websites.
  • Look at fees, not just rates. Low rates usually mean high fees. Question all of the lender’s fees and look out for any unnecessary administrative, processing or courier fees. You’ll only know the true cost of your mortgage after you take everything, from photocopying costs to legal fees, into consideration.
  • Having a good relationship with a lender. This can make a difference regarding the interest rates that are offered to you. A great payment record and a high credit score could guarantee you the best interest rate that the lender can offer. On the other hand, borrowers with spotty payment records will be offered less than advantageous interest rates.

Tips on Getting the Best RatesEven if interest rates are very low right now, getting the lowest rate possible depends on many elements. Before refinancing, you should take into consideration factors like how likely it is for you to move in the near future, your financial situation, and your financial history. In order to receive the best refinance mortgage rates, you need to understand the process and have everything in order financially.

Today’s Mortgage Rates – Take Advantage Now!

today's mortgage ratesWhether you’re a prospective first-time homeowner, or simply looking for another property to buy, you need to be aware of today’s mortgage rates. With rates changing every day, the dangers of being locked into a bad mortgage rate are serious, and could cause you to lose thousands of dollars down the road. So what can you do to prevent this from happening to you? Well, first of all, let’s learn a little bit more about today’s mortgage rates.

A mortgage rate is the price of interest that borrowers pay off of their principal amount. These rates are set by various banks, each of which is competing with one another for the attention of the consumers. This competition is one of the mechanisms of capitalism that helps keep mortgage rates relatively low.

However, where do the banks get their rates from? Well, in the United States, today’s changing mortgage rates based on the price of Mortgage Backed Securities (MBS). The greater the demand for MBS is, the lower the rate of interest is for home mortgages. Demand for MBS is created by investors, who often try to buy MBS when the stock market is down, or sell it when inflation is high. By paying careful attention to these trends in the marketplace, borrowers can determine when the best time is to take out a mortgage.

Why Do Mortgage Rates Matter?

Well, with a mortgage, borrowers lock into a set rate for a specific period of time. If you lock into a longer term, then you effectively shield yourself from any short-term market volatility. However, the flip side of that coin is that you also prevent yourself from capitalizing on any potential gains. For example, if you’re locked into a five year mortgage term, and mortgage rates gradually go down by a couple percentage points over the next two years, then you are paying thousands of dollars more than you should for the remaining three years of that mortgage.

Meanwhile, somebody who has locked into a shorter, two year mortgage term can refinance after the term is up in order to take advantage of those lower interest rates. In that sense, taking out a mortgage can be likened to high-stakes gambling: with thousands of dollars at stake, should you choose short-term risk now with a chance to minimize your interest in the future? Or should you lock into a long-term mortgage at a slightly higher rate in order to avoid market volatility?

There is a huge debate in the mortgage community about this very topic and, essentially, there is no right answer. Today’s mortgage rates are in a constant state of flux, and nobody knows for sure in which direction they are going. While today’s economic situation may prevent much up or down movement over the next two years, what will happen four or five years from now?

Check-Online-For-Mortgage-RatesOnly time can tell, which means that you should mainly focus on the mortgage rates today. In order to compare today’s mortgage rates, check online for independent mortgage rate charts, which will highlight the lowest and highest interest rates in the country, as well as the lender’s currents rates on variable or long-term mortgages. This will allow you to choose the best mortgage rate for you right now. After that, whether you choose a variable or fixed-rate mortgage is entirely up to you.