Today’s Mortgage and Refinance Rate: October 26, 2021

By on October 26, 2021 0

Fixed mortgage rates have been rising steadily for about six weeks. They are still relatively low, but for the first time in months, 30-year rates are above 3.5% and 15-year rates are above 2.5%.

Even as fixed rates rise, data from Freddie Mac shows rates are still significantly lower than they have been for the past five years:

Mortgage rates will likely stay low for the remainder of 2021, but we could see them rise in 2022.

Mortgage rates today

Money.com conventional rates; RedVentures government guaranteed rates.

Mortgage Refinance Rate Today

Money.com conventional rates; RedVentures government guaranteed rates.

What is a mortgage rate?

A mortgage rate is the interest you pay on the money you borrow from a lender to buy or refinance your home. These are basically the fees you pay to borrow, expressed as a percentage. For example, you can take out a mortgage for $ 200,000 plus an interest rate of 2.75%.

There are two types of mortgage rates: fixed rates and adjustable rates.

A fixed rate mortgage lock in your rate for the duration of your mortgage. Even if the rates in the US market go up or down, your rate will stay the same. This is a particularly attractive offer at the moment, as rates are at historically low levels overall.

a adjustable rate mortgage keeps your rate the same for a predetermined amount of time, then changes it periodically. An ARM 5/1 locks in your rate for the first five years, then the rate fluctuates once a year. This is a riskier approach these days, as you risk your rate going up later since rates are low right now.

How are mortgage rates determined?

Mortgage rates are determined by a combination of factors – some you can control and some you cannot.

The main external factor is economy. Interest rates tend to be higher when the US economy is booming and lower when it is struggling. The two main economic factors that affect mortgage rates are employment and inflation. When the number of jobs and inflation increase, mortgage rates tend to rise.

You can control your finances, although. The better your credit score, debt-to-income ratio, and down payment, the lower your rate should be.

Finally, your mortgage rate depends on what type of mortgage you obtain. Government guaranteed mortgages (like FHA, VA, and USDA loans) charge the lowest rates, while jumbo mortgages charge the highest rates. You will also get a lower rate with a shorter mortgage term.

How to 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 mortgage.

A lender should be relatively affordable. You shouldn’t need a very high credit score or down payment to get a loan. You also want it to offer good rates and charge reasonable fees.

Once you’re ready to start shopping for homes, apply for pre-approval with your top three or four choices. A pre-approval letter indicates that the lender wants to lend you up to a certain amount, at a specific interest rate. When you are pre-approved, your mortgage rate is locked in for 60 to 90 days. With a few pre-approval letters in hand, you can compare each lender’s offer.

When you apply for pre-approval, a lender does a serious credit check. A bunch of serious inquiries on your report can hurt your credit score, unless it’s to buy the best rate.

If you limit your rate purchases to about a month, the credit bureaus will understand that you are looking for a home and should not hold back every individual investigation against you.


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