Mortgage rates often see ups and downs according to the situation of the market and the current rates are seemingly lower than before which makes getting mortgage easier for you. Mortgage details for some important topics are mentioned below so have a look and be informed before making decisions.
Understanding Current Interest Rates
In the current market scenario, the interest rate seems to change quite often. However, the interest rates were lower earlier this year, but it can definitely change in the near future. A recent survey of the country’s largest mortgage lenders revealed current rates of some products which are as follows:
• 10 year fixed rate has an interest rate of 2.370% with the APR being 2.510%
• 15 year fixed rate has an interest rate of 2.480% with the APR being 2.700%
• 20 year fixed rate has an interest rate of 2.930% with the APR being 3.080%
• 30 year fixed rate has an interest rate of 3.010% with the APR being 3.210%
How Rates Are Trending
The rate trend index reveals that current mortgage rates are most probably going to stay the same for a longer period of time. Likewise, 71% of the experts predict that there will be no rise or downfall in the current rates; however, 14% predict that the rates can seemingly increase and 14% predict that the rates may go down in the near future.
Some of the big lenders where rates are trending down are Well Fargo, Fannie Mac, Freddie Mac, Mortgage Bankers Association, National Association of Realtors, and National Association of Home Builders.
The average rates of all lenders are roughly 3.18%
How to Get the Best Mortgage Rate
To get the best mortgage rates from lenders one thing that will surely help you is a great credit score, as people with good credit scores get better mortgages rates and the chance of getting a loan is also higher.
Moreover, if you offer a big down payment to your lender, the chances of the mortgages rates going down are higher.
Other ways to get a good mortgage rate is to show your lender that you can make the repayment easily. Opting for a 15 year mortgage is also a great idea if you want your mortgage rates to go low. Besides, if you are a first time buyer, you can look for special scheme that offer low mortgages rates. In the end, an important thing is to compare rates from multiple lenders so you can have options and choose the lender that offers you the best mortgage rates.
APR vs. Interest Rate
Interest rate can be a fixed amount or varies from lender to lender. It is the cost you have to pay when you borrow the principal loan amount and is expressed only in percentage.
APR or Annual Percentage Rate is different from interest rate in that it is a broader way to measure the cost of any mortgage. The APR includes factors like discount points, interest rate, and the broker fees.
The APR and Interest rate allows you to compare loans from different lenders. The higher your credit score will be, the lower interest rate will be charged on your loan. However, the APR is determined by your lender since it includes lender fees. The payment you will make monthly will be based on the rate of interest only and not the APR.
First Time Homebuyer Loans and Programs
If you’re about to buy your first real estate property, then you definitely should get a first-time homebuyer program that will provide you with various benefits including a lower interest rate on your first real estate purchase.
- FHA Loan Program: This homebuyer program is best suitable for you if you have a low credit score and less money for the down payment. Federal Housing Administration has insured the FHA loan program.
- Freddie Mac Loan Program: Loan programs by Freddie Mac are great if you have a strong credit score. They only require 3% down payment.
- USDA Loan Program: The USDA loan program is 100% guaranteed by US Department of Agriculture. It is great for you if you have a low income and it is also eligible in rural areas of the state.
Some first time homebuyer programs are as follows:
How to Pay Off Your Mortgage Early
Paying off your mortgage loan early is a great decision and will save you dollars on the interest rates. However, here’s what you can do to pay off early:
- Contact your lender and inform them to shorten your mortgage term and be prepared to pay a little extra each month.
- You can also overpay your mortgage by paying more than the monthly sum to your lender
- The decision in the end to pay off early is yours. Make sure you have enough money saved to pay off early.
How to Refinance Your Mortgage
To refinance your mortgages you can follow the below mentioned steps:
• Set a goal of reducing your monthly payments to shorten the loan tenure
• Look for the best mortgage refinance rates and fees
• Apply for a mortgage with multiple lenders
• Keep your credit score strong
• Choose a refinance lender and compare the documents from multiple lenders
The best time to refinance your mortgage is when the interest rate is lower than when you initially closed it – and it needs to be low enough that you can quickly recover the closing costs for the new loan quickly.
Mortgage Lender Reviews
Some of the top mortgage lenders in 2020 are as follows:
• Better.com – Down Payment 3% – Minimum Credit Score 620
• Rocket Mortgage – Down Payment 3% – Minimum Credit Score 620
• New America Funding- Down Payment 3% – Minimum Credit Score 700
• Sofi – Down Payment 10% – Minimum Credit Score 660
These were some of the important statistics about mortgage rates and mortgage details that can help you to get a mortgage loan in the near future.