Mortgage rates jump above 3% – what does this mean for you

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Mortgage rates rose this week to over 3% for the first time in 10 weeks.

Average 30 year fixed rate mortgage rose 0.09% to 3.02%, the largest weekly rate change we’ve seen since early April, according to data Freddie Mac’s Weekly Assessment Poll

Until current mortgage rates still exceptionally low in a historical sense, the latest hike could be a sign of what is coming for potential home buyers and homeowners who may benefit from refinancing. While you can still lock in a low rate, experts predict mortgage rates will rise this year… So while this latest upward swing is not entirely unexpected, it is a change compared to how stable they are. in recent weeks

What does it mean if you are interested in refinancing

If you were in doubt about whether or not to consider refinancing your mortgage, now is still a great time to do so. But don’t risk waiting too long, says Ali Wolf, the company’s chief economist. Zonda, a California-based consulting and housing company. Interest rates are likely to remain low for a few more months, Wolf said, so there is still time. “If you haven’t refinanced in the past four or five years, I would say go ahead.”

There are many factors to consider when refinancing, such as the length of the new maturity, upfront closing costs, and how long you plan to stay in your home. But you have potential save hundreds of dollars a month and thousands of dollars of interest over the life of the loan. For example, let’s say you went from 4% to 3%. A 1% rate cut on a $ 300,000 30-year home loan will cut your monthly payment by $ 168 and save you more than $ 60,000 in interest over the life of the loan.

What does this mean for home buyers

But for homebuyers today historically low mortgage rates it’s like a double-edged sword. Low rates have boosted the purchasing power of buyers, which, combined with low inventory levels, has led to a sharp jump in home prices. Home buyers may qualify for a bargain rate but struggle to get their offers accepted in today’s market where bidding war become normal.

Regardless of what type of mortgage you need – buy or refinance – it is important to compare offers from different mortgage lenders find the best deal. Each lender will evaluate your finances differently, which will affect your rates and fees.

Pay attention to the size of the commission, printed in small print. Even if you don’t pay them out of pocket because you choose refinancing without closing costs, your closing costs may be added to your loan balance, or you may be charged a higher interest rate. Therefore, be sure to read carefully Loan valuation provided by each creditor upon application.

What does this mean for mortgage rates going forward

As the economy continues to recover from the damage caused by the pandemic, many experts expect that mortgage rates will continue to rise in 2021… So whether you are a potential home buyer or a homeowner who could benefit from refinancing, make sure you pay attention to how the rate hike might affect your situation.

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