Mortgage rates today is mostly lower than last week and last month. Overall, this is a good day to lock in a low rate.
If you are ready to buy or refinance, you will probably need fixed rate mortgage, not adjustable rate mortgage… ARM rates are starting higher than flat rates right now, and you run the risk of growing even more in a few years. While there is an opportunity, it is safer to fix a record low rate.
The mortgage rate is the percentage you pay on money borrowed from a lender to buy or refinance your home. Basically, this is the commission you pay for the loan, expressed as a percentage. For example, you can take out a $ 200,000 mortgage loan plus an interest rate of 2.75%.
There are two types of mortgage rates: fixed and adjustable…
BUT fixed rate mortgage fixes your rate for the entire term of the mortgage. Even if rates in the US market increase or decrease, your rate will remain the same. This is especially important now as rates are at historic lows.
An adjustable rate mortgage keeps your rate constant for a predetermined period of time and then changes it periodically. 10/1 ARM fixes your rate for the first 10 years, then the rate fluctuates once a year. This is a more risky approach these days because ARM rates start above the fixed rates and you risk your rate going up later.
Mortgage rates are determined combination of factors – some you can control and some you cannot.
The main external factor is economy… Interest rates are usually higher when the US economy is doing well and lower when it is in trouble. The two main economic factors affecting mortgage rates are employment and inflation… When jobs and inflation rise, mortgage rates tend to rise.
Finally, your mortgage rate depends on what type of mortgage you get. Government-backed mortgages (for example, FHA, VA, as well as USDA loans) charge the lowest rates, while giant mortgage charge the highest rates. You will also get a lower rate with a shorter term mortgage.
Each type of mortgage is different minimum credit rating requirement… This is how it usually fails:
However, these are just general rules of thumb. Every lender has the right to claim a higher or lower credit rating. (Although the FHA minimums listed here are the minimum that the lender will accept.)
If your credit rating is higher than the minimum required by the lender, you can get the best mortgage interest rate.
Mortgage rates for the last week and month
Dynamics of mortgage rates
Average refinancing rates for fixed and variable rate mortgages declined from last week and from last month. Today there is no average mortgage purchase rate higher than 4%. Highest – average for ARM 7/1 – 3.91%. Average rates on government-backed mortgages are noticeably lower than most regular rates – well below 3% – but in line with last week and last month.
However, the lowest average mortgage rate today is 2.36% for a 15-year fixed loan.
Refinancing rates dynamics
Average refinancing rates today are generally higher than average mortgage loan rates, but still lower compared to last week and last month on refinancing loans. The highest rate is quoted for the 7/1 ARM at 4.25% and the lowest for the 15-year fixed loan at 2.58% – the same loans that cost the most and least among the average mortgage rates.
Mortgage and refinancing rates by state
Check out the latest rates in your state using the links below.
Laura Grace Tarpley is editor of Personal Finance Insider covering mortgages, refinancing and lending. She is also a Certified Personal Finance Faculty (CEPF). During her five years in personal finance, she has written extensively about ways to handle loans.
Ryan Wangman is a Research Fellow at Personal Finance Insider who writes on mortgages, refinancing, bank accounts, bank reviews and loans. In his past writing experience on personal finance, he has written about credit ratings, financial literacy, and home ownership.