Mortgage rates jump above 3% for the first time since April — economists warn they’re likely to rise higher

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MarketWatch 24 June, 2021 - 09:11am 23 views

Are mortgage rates going up?

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 3.02 percent with an average 0.7 point. ... (Points are fees paid to a lender equal to 1 percent of the loan amount. The Washington PostMortgage rates rise to highest levels in two months

The 15-year fixed-rate mortgage, meanwhile, rose 10 basis points to an average of 2.34%. The 5-year Treasury-indexed adjustable-rate mortgage averaged 2.53%, up one basis point from the previous week.

“All told, after a brief jolt upwards, markets once again appear to be in a holding pattern, waiting for the next bit of news that might push yields and rates in one direction or another,” said Matthew Speakman, an economist with Zillow, “and they might not have to wait much longer, as May inflation figures are due on Friday.”

“As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,” Freddie Mac chief economist Sam Khater said in the report. “For those homeowners who have not yet refinanced — and there remain many borrowers who could benefit from doing so — now is the time.”

Rising rates also pose significant challenges to home buyers. Home prices continue to increase at a breakneck pace, and the median price for an existing home has reached a record high. The combination of rising rates and rising prices could end up pricing a lot of Americans out of the real estate market, which could prolong the downturn in home sales seen in recent months.

 “Buyers are running out of steam,” said George Ratiu, senior economist at Realtor.com. He added that the housing market desperately needs a greater supply of homes to tamp down rising prices. “Without additional supply, favorable financing remains a one-legged stool trying to provide a wobbly foundation for sustainable growth,” he said.

‘She argues that it is not too much because it took her over two years to repay the loan.’

Jacob Passy is a personal-finance reporter for MarketWatch and is based in New York.

Read full article at MarketWatch

U.S. mortgage applications increase on refinancing interest -MBA

Yahoo Finance 24 June, 2021 - 04:06pm

(Reuters) - U.S. applications for home mortgages increased last week driven by an increase in refinancing activity and an uptick in purchase applications.

The Mortgage Bankers Association (MBA) said on Wednesday its seasonally adjusted market index rose 2.1% in the week ending June 18 from a week earlier. This reflected a 2.8% increase in applications for refinancing and was 9% lower than the same week one year ago.

The purchase index increased 0.6% from a week earlier.

The average contract interest rate for traditional 30-year mortgages increased to 3.18% last week from 3.11% the prior week, the highest level in a month.

"Despite the jump in rates, refinances increased for the second consecutive week, pushed higher by a 4 percent bump in conventional refinance applications," Joel Kan, MBA's associate vice president of economic and industry forecasting, said in a statement. "Purchase applications have regained an upward trend over the past few weeks. Activity was slightly higher for the third straight week, but remained lower than the same week a year ago."

Surging home prices and limited supply has continued to put a lid on home sales recently. The National Association of Realtors on Tuesday reported that existing home sales declined for the fourth consecutive month in May.

Later on Wednesday, the Commerce Department will release data for sales of new U.S. single-family homes in May. Economists polled by Reuters forecast new home sales to increase to a seasonally adjusted annual rate of 870,000 units from 863,000 in April.

(Reporting by Evan Sully; Editing by Chizu Nomiyama)

Enticing refi opportunities are driving increases in mortgage applications.

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(Reuters) -Southwest Airlines Co said on Wednesday long-time Chief Executive Officer Gary Kelly will step down next year and be succeeded by insider Robert Jordan as the company pushes past the coronavirus pandemic that hammered travel demand. Low-cost carrier Southwest took an aggressive strategy during the pandemic, launching service to more than a dozen new cities and sealing a major aircraft order with Boeing Co. It has said it expects to stop burning cash by June. "The challenges more than anything are executing as we come out of the pandemic," Jordan told Reuters.

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(Bloomberg) -- Supply Lines is a daily newsletter that tracks trade and supply chains disrupted by the pandemic. Sign up here.Major metals supplier Russia plans temporary taxes on steel, nickel, aluminum and copper exports to help cool domestic inflation after prices surged amid a broad-based commodities rally.The government is proposing that a duty of at least 15% will be effective from Aug. 1 through year-end, with each metal also having a specific duty, Economy Minister Maxim Reshetnikov said

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1919 and 1.1909.

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Starting in July, eligible families will receive monthly payments of $250 for every child aged 6 through 17.

Booming financial markets pushed up asset values so much that 1pc of the global population - more than 56m people - are now dollar millionaires, according to Credit Suisse’s Wealth Report. Despite the economic carnage wrought by the pandemic and some significant market turmoil, prices of shares and houses have typically risen sharply, after central banks and governments pumped money into the economy. Overall global household wealth rose by $28.7 trillion (£20.5 trillion) in 2020 to end the year

Economic data and the ECB’s Economic Bulletin for June ultimately delivered EUR support, while ECB caution was evident in the Bulletin.

It’s a busy day ahead for the markets, with prelim private sector PMI numbers for June due out of the Eurozone, the UK, and the U.S later today. Expect plenty of sensitivity to the numbers.

Federal Reserve Chairman Jerome Powell told lawmakers that it’s “very, very unlikely” that inflation will rise to levels seen in the 1970s, while acknowledging uncertainty as the economy reopens.

Ongoing claims for U.S. unemployment insurance have dipped faster in recent weeks in states ending federal benefits this summer than in states keeping the $300 weekly supplement in place until the fall, according to government data through last week. From the week ending May 1 through the week ending June 12, continuing claims for state unemployment benefits fell 17.8% in the 26 states ending benefits early, to 990,000, and by 12.6%, to 2.18 million, in the rest of the country, according to a Reuters analysis of weekly federal unemployment data. Weekly data from small business time provider Homebase through the week ending June 20 in fact has shown no pickup in hiring in the states cancelling unemployment benefits.

Inflation over the long-term is a probability but not a certainty. Macroeconomics is a voodoo science; it appropriately belongs in the liberal arts department. Here is an example: Japan is the most indebted developed nation in the word (its debt-to-GDP exceeds 260%, while that of the U.S. is 130% or so).

Today's mortgage rates: 30-year rates fall, other terms unchanged | June 24, 2021

Fox Business 24 June, 2021 - 04:06pm

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Based on data compiled by Credible, mortgage rates remain mostly unchanged since yesterday, with the exception of the 30-year rate, which dropped slightly.

What this means: Today’s 30-year mortgage rates have dropped back down to 2.750%, where they sat for 21 consecutive days before spiking at 3% on June 17 for the first time since the end of April. Rates across 20-year, 15-year and 10-year terms have fluctuated slightly from day to day since the beginning of the year but remain unchanged for the second day in a row. 

To find the best mortgage rate, start by using Credible, which can show you current mortgage and refinance rates:

Browse rates from multiple lenders so you can make an informed decision about your home loan.

Today’s 30-year mortgage refinance rates dropped back down to 2.750% after spiking to 3% on June 17 for the first time since May 17. Rates for a 20-year term have remained unchanged for five consecutive days, and rates for 15-year and 10-year terms have held steady for three consecutive days. Refinance rates across all terms continue to mirror purchase rates, which could mean a particular bargain for homeowners who decide to refinance. If you’re considering refinancing an existing home, check out what refinance rates look like:

A site like Credible can be a big help when you’re ready to compare mortgage refinance loans. Credible lets you see prequalified rates for conventional mortgages from multiple lenders all within a few minutes. Visit Credible today to get started.

Mortgage and refinance rates are affected by many economic factors, like unemployment numbers and inflation. But your personal financial history will also determine the rates you’re offered.

If you want to get the lowest possible monthly mortgage payment, taking the following steps can help you secure a lower rate on your home loan:

It’s also a good idea to compare rates from different lenders to find the best rate for your financial goals. According to research from Freddie Mac, borrowers can save $1,500 on average over the life of their loan by shopping for just one additional rate quote — and an average of $3,000 by comparing five rate quotes. 

Credible can help you compare current rates from multiple mortgage lenders at once in just a few minutes. Are you looking to refinance an existing home? Use Credible’s online tools to compare rates and get prequalified today.

After reaching a 2.5% average across all terms on Tuesday, average mortgage rates have slid back down to 2.406%.

The current interest rate for a 30-year fixed-rate mortgage is 2.750%. This is down from yesterday. Thirty years is the most common repayment term for mortgages because 30-year mortgages typically give you a lower monthly payment. But they also typically come with higher interest rates, meaning you’ll ultimately pay more in interest over the life of the loan.

The current interest rate for a 20-year fixed-rate mortgage is 2.750%. This is the same as yesterday. Shortening your repayment term by just 10 years can mean you’ll get a lower interest rate — and pay less in total interest over the life of the loan.

The current interest rate for a 15-year fixed-rate mortgage is 2.125%. This is the same as yesterday. Fifteen-year mortgages are the second-most-common mortgage term. A 15-year mortgage may help you get a lower rate than a 30-year term — and pay less interest over the life of the loan — while keeping monthly payments manageable. 

The current interest rate for a 10-year fixed-rate mortgage is 2.000%. This is the same as yesterday. Although less common than 30-year and 15-year mortgages, a 10-year fixed-rate mortgage typically gives you lower interest rates and lifetime interest costs, but a higher monthly mortgage payment.

You can explore your mortgage options in minutes by visiting Credible to compare current rates from various lenders who offer mortgage refinancing as well as home loans. Check out Credible and get prequalified today, and take a look at today’s refinance rates through the link below.

Today, mortgage rates are mixed compared to this time last week.

If you’re trying to find the right rate for your home mortgage or looking to refinance an existing home, consider using Credible. You can use Credible's free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

Researchers at Freddie Mac expect mortgage rates to rise slightly throughout 2021, citing the Federal Reserve’s commitment to keeping interest rates low for the foreseeable future.

Fannie Mae researchers anticipate mortgage rates to trend slightly higher this year, citing an ongoing rise in the 10-year Treasury yield. Ultimately, though, Fannie Mae experts believe lenders will "absorb" some of the elevated costs as "refinance demand gradually wanes" — keeping rates at relatively stable levels. 

Here are the predictions for how 30-year fixed rates will look for the rest of the year:

Actual average 30-year fixed rate in Q1 (January to March): 2.877%

A home insurance policy can help cover unexpected costs you may incur during homeownership, such as structural damage and destruction or stolen personal property. Coverage can vary widely among lenders so it’s wise to shop around and compare policy quotes.

Credible is partnered with a home insurance broker. If you're looking for a better rate on home insurance and are considering switching providers, consider using an online broker. You can compare quotes from top-rated insurance carriers in your area — it's fast, easy and the whole process can be completed entirely online.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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Should you get an interest-only mortgage?

Fox Business 24 June, 2021 - 04:06pm

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When searching for a home loan, an interest-only mortgage loan is one possibility you might consider. This type of mortgage doesn't require you to make principal payments initially. Instead, you just make payments toward the interest on the loan.

That's a big difference compared to a traditional 30-year fixed mortgage, which amortizes principal and interest across the life of the loan. If you are interested in an interest-only loan, the tips below could help you decide if it is right for you. 

To explore your loan options, visit Credible to compare current mortgage rates and lenders. 

Conventional loans require you to make payments toward the interest and principal for a set term, usually 15 years or 30 years. At the beginning of the loan term, most of your loan payment goes toward the interest. As you near the end of a 15-year mortgage or 30-year mortgage, the bulk of your payment goes to the principal loan balance.

Interest-only mortgages allow you to make loan payments toward the interest during the first part of your mortgage term. For example, you might make interest-only payments for the first five to 10 years. Interest-only loans can have mortgage rates that are fixed rates or adjustable rates. Once the initial interest-only term ends, you'd continue making payments toward the loan with both principal and interest amortized.

An interest-only mortgage is a type of nonconforming home loan. That means they aren't backed or insured by Fannie Mae or Freddie Mac. Interest-only mortgages are less common than other types of home loans and not every financial institution offers them. You can get in touch with Credible's experienced loan officers to get answers to your mortgage questions, including more on how interest-only mortgages work and what types of mortgages are available to you.

Getting an interest-only home loan can offer advantages for some buyers, though there are some considerations to keep in mind. It's helpful to weigh the pros and cons to decide if it's a good fit.

Since interest-only mortgages aren't government-backed, lenders can set their own standards for approval. For instance, lenders may accept borrowers with lower credit scores if they have a steady monthly income, substantial cash in savings or a higher net worth.

But is an interest-only mortgage right for you? You might consider this type of home loan if:

You may also consider an interest-only mortgage if you're confident that you'll refinance to a conventional loan down the line. Credible can help you compare multiple mortgage lenders at once and see your loan options in just a few minutes

There are many pros and cons, and interest-only mortgages aren't for everyone, but they can offer some great benefits for those who qualify.  And qualifying for these loans could be easier since they aren't conforming loans, and backed by Fannie Mae or Freddie Mac. If you're seeking lower monthly payments, easier qualification based on credit history or short-term cash savings, an interest-only home loan could be the right mortgage option. You can use Credible's online mortgage calculator and other tools and get prequalified today. 

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APR vs. interest rate: What are the differences?

CNET 24 June, 2021 - 04:06pm

Knowing the crucial differences between the interest rate and APR will help you calculate your monthly payment, understand the total cost of a loan and, ultimately, identify the best deal. Here's why understanding how an APR impacts your loan -- especially in the context of a mortgage that can run into the hundreds of thousands of dollars -- is so important.

An interest rate is the percentage of a loan you'll pay to the lender in exchange for borrowing money. With a mortgage, when you begin making monthly payments, interest is included in your payment. The actual rate you'll pay for a loan depends on a few factors.

Interest rates are set by the Federal Open Market Committee (often referred to as "The Fed"), which is made up of representatives from the Federal Reserve. The Fed meets several times per year to discuss the state of the economy and adjust interest rates as needed. The Committee's job is to maintain healthy economic growth while keeping inflation at bay.

Currently, interest rates are at historic lows -- due in part to the coronavirus pandemic, but continuing a trend originating during the 2008 financial crisis. At the end of April 2021, the Fed decided to keep rates close to zero to keep financing as affordable as possible for businesses and individuals during this tough economic time.

Your credit score also impacts the interest rate you're offered. Advertised interest rates are usually reserved for borrowers with excellent credit -- traditionally defined as a score of 760 or higher -- and may also include a rate discount for setting up automatic loan payments.

Individuals with a lower credit score (under 760) are usually offered higher interest rates to mitigate the lender's risk of losing money if the borrower defaults on their loan. A low credit score, a history of late payments or collection accounts can impact whether you're approved for a loan. And if you are approved, you'll likely be charged a higher interest rate than a borrower with good-to-excellent credit. 

Most lenders recommend cleaning up your credit and finances before applying for a loan. Improving your credit score by paying down your debts and creating a history of on-time payments could save you thousands of dollars in interest on a mortgage.

For example, look at how a 0.5% difference in interest rates can change the total cost of a $300,000 loan over 30 years. 

Though the numbers may be smaller for a credit card or car loan, modest differences in interest rates can add up over the years. 

In addition to your interest rate, there are other costs included in your home loan. The interest rate may be the most significant factor, but annual fees, closing costs and additional charges may add to the cost of borrowing money. 

The annual percentage rate is typically higher than an interest rate because it includes all the costs of borrowing money. Some fees that may be incorporated into the APR are:

While you may not always be able to negotiate your interest rate, you may be able to negotiate some of the fees included in your APR. The fewer the charges associated with the loan, the lower the APR.

The Truth in Lending Act was enacted in 1968 to make credit cards and loans more transparent, so buyers know what they're comparing -- and signing up for. One of the Act's requirements is that lenders must report APR, which reflects the extra costs of borrowing more accurately. You'll find the APR advertised alongside the interest rate. You can also find it in the Loan Estimate. The interest rate is usually shown on page one under "Loan Terms," and the APR usually appears on page three under the "Comparisons" section.

A fixed APR does not change. But a variable rate APR can fluctuate based on index rate changes, such as the Wall Street Journal's published prime rate. Some variable APRs -- penalty APRs -- can also change as a penalty if you make late payments. 

The loan terms you choose will also impact the amount of interest and other fees you'll pay over the lifetime of your mortgage. You'll typically be able to make lower monthly payments and pay less monthly interest and fees with a 30-year mortgage than with a 15-year home loan. But, since you'll be making this payment for twice the amount of time, you'll ultimately pay more in interest. Generally, you'll pay less interest and fees overall with a shorter mortgage term.

Here's an example of how a loan term can impact your APR, based on a $250,000 home loan.

In this example, Option B has the lowest APR -- 3.350% for a 30-year loan term -- and may seem like the best choice at first glance. The monthly payment is the smallest at $870.41, over $500 cheaper per month than Option A. However, because Option B is spread out across 30 years, you'll pay more than double the amount of interest than you would with Option A. 

Bottom line: Interest rates are only part of the picture. When you're shopping for a mortgage or any other type of loan, comparing APR rates across lenders will give you the most accurate and complete view of your costs. A lender could advertise the lowest interest rate yet charge a higher APR, costing you more money in interest in the long term. 

A direct deposit of news and advice to help you make the smartest decisions with your money.

Mortgage Rates Reach Highest Level Since April - WSJ.com

The Wall Street Journal 24 June, 2021 - 04:06pm

The average rate on a 30-year fixed-rate mortgage rose to 3.02% from 2.93% last week, mortgage-finance giant Freddie Mac said.

“As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,” said Sam Khater, chief economist at Freddie Mac.

As mortgage rates rise, Americans race to refinance and beat even higher rates

Yahoo Finance 24 June, 2021 - 12:34pm

Lenders are continuing to see healthy growth in both refinance and homebuyer mortgage applications, a new report says. Mortgage rates remain at historic lows, despite recent increases, and are keeping refinance activity going strong. Purchase loan demand is increasing more modestly, due to low supplies of homes for sale.

Both buyers and refinancing homeowners may be sensing that today’s 3% mortgage rates may not last much longer as the U.S. economy bounces back from the worst of the pandemic.

Mortgage applications rose 2.1% last week, the Mortgage Bankers Association (MBA) reported on Wednesday. The increase follows a jump of 4.2% a week earlier, coming after three weeks of steady declines.

Demand for both refinance and purchase loans increased, with refis up 4% and loans to buy homes rising 1% on a seasonally adjusted basis.

Joel Kan, the MBA's associate vice president of economic and industry forecasting, notes that mortgage rates increased last week in the trade group's survey, with the 30-year fixed rate rising from 3.11% to 3.18% — the highest in a month.

“Despite the jump in rates, refinances increased for the second consecutive week," Kan says. Refinance loans also accounted for 62.5% of all new mortgage borrowing, up from 61.7% a week earlier.

Compared to a year ago, refinance applications last week were down 9%, and purchase applications fell by 14%. That's mostly a reflection of just how out of control mortgage demand was last year at this time, when ultra-low rates fueled a COVID real estate boom.

Another new report also shows mortgage rates are moving up: Mortgage giant Freddie Mac on Thursday said 30-year rates this week have jumped to an average 3.02%, from 2.93% last week. It's the first time in 10 weeks that the benchmark mortgage rate has topped 3%.

The low-rate bonanza Americans have been enjoying for more than a year won't last once the nation's COVID recovery looks more solid.

At that point, inflation is likely to hit 2% for a sustained period, which is what the Federal Reserve has said it wants to see before it will raise interest rates again. The Fed has helped keep mortgage rates low by holding a key borrowing cost close to 0%.

As the economy improves, rates on home loans will climb, Freddie Mac says. The company is currently forecasting that 30-year fixed rates will average 3.2% this year and 3.7% in 2022.

"For those homeowners who have not yet refinanced – and there remain many borrowers who could benefit from doing so – now is the time," says Sam Khater, Freddie Mac's chief economist, in a statement.

If you have a 30-year mortgage and have built up 20% equity in your home, you're among 14.1 million homeowners who could save an average $287 a month by refinancing, the mortgage data and technology company Black Knight recently said.

Solid credit will help you get a good deal on your refi, so check your credit score — then see what you can do if you need to beef it up.

Lenders also want to see that your cash flow is steady enough that you’ll be able to cover your new mortgage payments, so consider the following:

Deal with your other debts. It's hard to be approved for any home loan if you’re struggling to pay other, high-interest debts, including credit cards. Sweep those balances into a single, lower-interest debt consolidation loan. You’ll slash your interest charges and dump your debt much faster.

Cut your housing costs. Look around for a better deal on your homeowners insurance. If you get quotes from multiple insurers, you might cut your premiums by hundreds of dollars a year, according to studies from Freddie Mac and others.

Booming Covid debts, a relaxed attitude to heavy borrowing and a complacent view that interest rates will never rise risk leading the world into a new economic crisis, according to new analysis by Deutsche Bank. Eurozone nations, which ran into such trouble a decade ago, risk repeating their mistakes with economies across the rich world straying down the same dangerous path, said senior economist Sebastian Becker. “Credibility could become an issue as most governments were not able to achieve ba

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Content provided by Credible Operations, Inc. NMLS# 1681276, “Credible.” Not available in all states. www.nmlsconsumeraccess.org Mortgage rates for refinancing and home purchases are stagnating as inventory shrinks. However, an upward trend still seems apparent given movement during the past week and economic reopenings across America. window.credibleAsyncInit = function() { // #credible-rate-table is the selector of a div on the partner's site // where they want Credible's Rate table to be inse

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(Bloomberg) -- Mortgage rates in the U.S. rose above 3% for the first time in 10 weeks.The average for a 30-year loan was 3.02%, up from 2.93% last week and the highest since April 15, Freddie Mac said Thursday.“As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,” Sam Khater, chief economist at Freddie Mac, said in a statement. “For those homeowners who have not yet refinanced – and there remain many borro

Roth individual retirement accounts were created to help middle class earners set aside money for retirement that they wouldn’t have to pay taxes on at withdrawal. But PayPal co-founder Peter Thiel has used his Roth IRA to amass a $5 billion nest egg.

In this article, we will be looking at the 12 best EV stocks to invest in. To skip our detailed analysis on the EV industry, its history, current status, and future outlook, you can go ahead to the 5 Best EV Stocks to Invest In. In 2008, when Tesla, Inc. (NASDAQ: TSLA) released its first […]

The fantastical story of antivirus-software entrepreneur John McAfee in his later years should be a cautionary tale to other genius CEOs, especially Elon Musk.

Mortgage And Refinance Rates Today, June 24 | Rates steady-ish

The Mortgage Reports 24 June, 2021 - 06:30am

Judging by early movements in markets, mortgage rates today may hold steady or just inch either side of the neutral line. But I said that yesterday — and markets moved in the following hours, delivering that fall.

I’ve been hoping that we’d see at least one worthwhile fall this week. And it finally arrived yesterday. But it’s unclear how many more of those markets will have in store for the rest of this week and next.

Meanwhile, the upward pressures on mortgage rates are building. So my personal rate lock recommendations must remain:

However, I don’t claim perfect foresight. And your personal analysis could turn out to be as good as mine — or better. So you might choose to be guided by your instincts and your personal tolerance for risk.

Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time yesterday, were:

Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.

So use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, so far mortgage rates today look likely to barely move. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Here are some things you need to know:

So there’s a lot going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks, or months.

Regular readers will know that the greatest danger to low mortgage rates is the Federal Reserve. True, mortgage rates are likely to drift higher whatever the Fed does. Because economic recoveries tend to push those rates higher. And the one we’re in the midst of is a humdinger.

But the Fed is currently spending $40 billion a month buying mortgage-backed securities. And it’s the prices (and so yields) of those bonds that actually determine mortgage rates. What’s happening now is that those Fed purchases are keeping mortgage rates artificially low.

But that can’t last. And some day the Fed’s going to announce a phased program of reducing asset purchases, aka a “taper.” The reason mortgage rates rose so sharply last week is because it was talking about talking about a taper announcement.

And when one is actually announced, mortgage rates may rise much more sharply than they did last week. Indeed, the last time the Fed announced a taper, in 2013, mortgage rates leaped to 4.07% in May that year, up from 3.54% in April. That’s a big jump. And it followed an announcement — not the implementation — of a taper.

OK, nobody knows when the Fed will announce its taper. It could be as soon as July. Or as late as December. But few expect it to be much later than that.

Meanwhile, pressure is growing on it to move sooner rather than later. The Fed’s British equivalent, the Bank of England, had a policy meeting today. And, according to The Guardian, some observers expected it to announce that it will kill its asset purchases stone dead in August. That didn’t happen. But the fact it was on the cards illustrates how worried some economists are about inflation.

Of course, there’s no reason why the Fed should have followed suit, whatever the BoE decided. After all, it’s way more powerful and influential than the UK central bank. But there’s peer pressure, even among central bankers.

And the British mood could give extra ammunition to hawks within the Fed who are already arguing for an early date for tapering.

For more background, read Saturday’s weekend edition of this column, which has more space for in-depth analysis.

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But then the trend reversed and rates rose.

However, those rises were mostly replaced by falls in April, though those moderated during the second half of that month. Meanwhile, May saw falls very slightly outweighing rises. Freddie’s June 24 report puts that weekly average at 3.02% (with 0.7 fees and points), up from the previous week’s 2.93%.

Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.

And here are their current rates forecasts for the remaining quarters of 2021 (Q2/21, Q3/21, Q4/21) and the first quarter of 2022 (Q1/22).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on June 16 and the MBA’s on June 18. Freddie’s forecast is dated April 14. But it now updates only quarterly. So its numbers are looking stale.

However, given so many unknowables, the current crop of forecasts might be even more speculative than usual.

Some lenders have been spooked by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.

But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.

But, of course, you should be comparison shopping widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:

Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan.

Today’s mortgage and refinance rates  Average mortgage rates inched higher yesterday. That makes three consecutive business days on which they’ve moved by only the smallest measurable amount: up, down and […]

Today’s mortgage and refinance rates  Average mortgage rates inched lower yesterday. And that was enough to wipe out Friday’s equally tiny rise. But nearly all the damage wreaked last week […]

Today’s mortgage and refinance rates  Average mortgage rates just inched higher last Friday. It brought to an end a very bad week for those rates. Global markets have been volatile […]

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

What you need to know before making a down payment on your home

Fox Business 17 May, 2021 - 10:51am

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Most home buyers know that there are quite a few costs that impact a person's ability to buy a home. For example, when you're ready to buy, you'll need to be prepared to pay your home down payment and closing costs upfront. However, in addition, the interest rate that you're given on your home loan can also affect the size of your monthly mortgage payment. 

In an effort to help you make sense of these rates and fees, we've created a guide on mortgage down payments below. Keep reading to learn more about what you need to know before making a down payment on a property during the home buying process.

Explore your loan options by using an online mortgage broker like Credible to compare current rates and lenders.

First, it's important to note that there are many different types of loan programs available in the mortgage market. Each mortgage program comes with its own loan eligibility standards and down payment requirements. With that in mind, we've gone into more detail about what kind of down payments you can expect from the various loan types below: 

Use a mortgage payment calculator to get a sense of what your payment amounts could be at a variety of loan amounts.

When saving money, many people wonder how much their down payment will cost. Truthfully, the answer will depend on the home’s purchase price. However, in order to give you a better sense of what to expect, consider the following example: If you were to buy a $300,000 property, a 5% down payment would be $15,000. Meanwhile, a 20% down payment on the same house would be $60,000. 

While you’ll only have to meet the minimum down payment requirement, larger down payments are generally considered preferable over a lower down payment. For one thing, a larger down payment will lower your loan amount, which will help you save money on your monthly payments and may even secure you a lower interest rate. For another, you'll have more equity built up in your home, which will come in handy when you need to leverage your largest asset via a home equity loan or home equity line of credit (HELOC).

Visit Credible to get personalized loan rates in as little as three minutes without affecting your credit score.

Lastly, there are many different ways to come up with the funds for a down payment on your perfect home. To that end, we’ve listed some of them below for your consideration: 

In real estate, a down payment is one of the largest costs of buying a home. Yet, the more you know about it, the more prepared you can be when the time comes. In light of that, use the information in this post to help you get started on your journey to becoming a homeowner.

If you have any questions about your down payment or the rest of the mortgage process, visit Credible to be connected with experienced loan officers who can provide you with answers.

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