Today’s National Mortgage Rates, September 6, 2022 | Rates are just above 6%

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Almost two years have passed with record mortgage rates. Now 2022 has started with rates up from pre-pandemic levels.

Don’t cancel your home buying plans just yet. Although rates are higher than they were last year, they are still considered “normal” from a historical perspective. Only a few years ago, 30-year fixed rates were in the top 5%.

Either way, home buying decisions take a lot more into consideration besides the interest rate. Buying a house is making a lifestyle choice. What happens in the interest rate market can influence a decision, it is wise not to base it on just a few basis points of a mortgage rate. Setting and sticking to a realistic home buying budget is far more important than the rate you get.

Let’s take a look at current mortgage rates, where rates have been in the past, and what it all means for the borrower.

A handful of closely watched mortgage rates all climbed today. Fixed 30-year and 15-year mortgage rates have increased. The most common type of adjustable rate mortgage is the 5/1 Adjustable Rate Mortgage (ARM) also climbed.

The averages of the 30-year fixed, 15-year fixed and 5/1 MRAs are:

Mortgage rate forecasting: why do mortgage rates change?

Mortgage rates have increased due to various economic factors since the beginning of the year. High and persistent inflation matters, Jacob Channel, senior economic analyst at LendingTree, told us. The June inflation report showed inflation at 9.1%, the highest level in 40 years. But the latest July CPI report has year-on-year inflation at 8.5% – a sign that inflation is starting to subside.

To combat this inflation, the Federal Reserve raised its benchmark short-term interest rate. As inflation remained higher than expected, the Fed raised rates by 50 basis points in May, 75 basis points in June and 75 basis points in July.

Following the inflation report, mortgage rates soared ahead of the Fed announcement. “I think what we’re seeing is that lenders had already forecasted that the Fed was going to raise the fed funds rate by 75 basis points and they started preemptively pushing mortgage rates up,” we said. says Jacob Channel, senior economist at LendingTree. .

“There are signs that some of the main drivers of inflation are easing, such as the drop in oil and other commodity prices in July, slowing wage growth and easing pressures on the chain. However, service price increases driven by housing and pent-up demand for vehicles will keep inflation high in the coming months,” said Dawit Kebede, senior economist at the Credit Union National Association, in a statement. communicated.

What do today’s mortgage rates mean for your home buying plans?

Despite the dramatic increases, mortgage rates remain at relatively normal levels and are still considered historically favorable mortgage rates.

House prices are also on the rise, and as rates rise, this will also contribute to the rising cost of ownership. Prices have risen significantly from pre-pandemic levels, with a combination of limited supply of homes, higher construction costs and massive buyer demand driving the spike.

It’s also important to remember that while mortgage rates are significant and a difference of a point or two can mean a lot of money on a 30-year mortgage, experts advise against trying to time the market to get the best mortgage rate. Focus on finding the right home and do it when your personal lifestyle and financial situation indicate that it’s the right time.

Be sure to get quotes from different lenders to ensure you get the best deal, experts say. “The rate has a big impact on your monthly affordability as long as you keep that house,” Skylar Olsen, senior economist at Tomo, a digital real estate and mortgage company, told us. “It’s actually a critical part of that decision, and it requires shopping around.”

Closing costs and loan costs

When you take out a home loan, you need to be aware of closing costs. Closing costs can be anywhere from 3-6% of the loan amount and include fees such as loan origination fees, prepaid interest and property taxes. One way to reduce your outgoings is to accept a higher interest rate in exchange for credit from lenders. You can save money in the short term by using this strategy, so don’t overlook it if you plan to sell your home or refinance it in five to eight years.

Today’s Mortgage Refinance Rates

Refinancing has become a little more expensive today as 30-year and 15-year fixed refinance mortgages have seen their average rates increase. Shorter-term 10-year fixed rate refinance mortgages also saw an increase.

The average refinancing rates are as follows:

Check out the mortgage rates that meet your specific needs.

30-Year Fixed-Rate Mortgage Rates

The average 30-year fixed mortgage interest rate is 6.02%, an increase of 8 basis points from the previous week.

15-year mortgage rates

The median rate for a 15-year fixed mortgage is 5.20%, up 4 basis points from seven days ago.

The monthly payment on a 15-year fixed rate mortgage is higher than what you would pay on a 30-year mortgage. But 15-year loans have huge advantages: you’ll pay thousands less in interest and pay off your loan much faster.

5/1 ARM interest rate

A 5/1 ARM has an average rate of 4.46%, up 10 basis points from a week ago.

An ARM is ideal for individuals who will refinance or sell before the rate changes. If not, their interest rates could end up being remarkably higher after a rate adjustment.

For the first five years, a 5/1 ARM will typically have a lower interest rate than a 30-year fixed mortgage. Keep in mind that depending on your loan rate adjustment, your payment may increase significantly.

How We Determine Mortgage Rates

To get an idea of ​​how mortgage rates are changing, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The Daily Rates survey focuses on home loans where the borrower has a FICO score of 740+, an LTV of 80% or less, and lives in the home.

Mortgage interest rate data listed below based on the Bankrate Mortgage Rate Survey:

Updated September 6, 2022.

Frequently Asked Questions (FAQ) About Mortgage Rates:

How to benefit from the lowest mortgage rate?

Comparing mortgage offers is a great way to get the lowest interest rate.

The mortgage rate you’ll qualify for depends on a variety of factors that lenders take into account when assessing the likelihood of you paying off your home loan. Your credit score has an impact on your mortgage rate. And your loan-to-value (LTV) ratio matters, so having a bigger down payment is better for your interest rate.

But banks will see your situation differently. So you can provide the same documentation to three different banks and get offers with three different mortgage rates and equally varying fees.

When should I lock in my mortgage rate?

It is impossible to know which direction mortgage rates will go from one day to the next. That’s why a mortgage rate lock is such a useful tool, because it protects you if rates go up. And since interest rates are relatively low right now, you should lock in your rate as soon as possible.

A rate lock will only last for a certain amount of time, usually 30 to 60 days. If you’re having a problem with closing and it looks like your foreclosure rate is expiring, you should talk to your lender. It may offer a lock extension, however, you may need to pay a fee for this privilege.

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