HIKE ON MORTGAGE RATE

 

According to Bankrate.com, the average rate on a 30-year fixed mortgage is 6.04%. while the average rate on a 15-year mortgage is 5.26%. On a 30-year jumbo mortgage, the average rate is 5.91%, and the average rate on a 5/1 ARM is 4.10%.

Loan term Rate Change Rate last week
30-year mortgage

Rate 

6.04% +0.07% 5.97%
15-year mortgage Rate  5.26% +0.20% 5.06%
30-year Jumbo mortgage rate 5.91% +0.03% 5.88%
5/1 ARM rate 4.10% +0.15% 3.95%

Mortgage rates were up last week

A 30-year fixed-rate mortgage currently costs 5.23% with 0.9 points paid, up 0.14 percentage points from a week ago. In the same period last year, the average rate on a 30-year loan was 2.96 percent.

A 15-year fixed-rate mortgage currently costs 4.38% plus 0.8 points, which is 0.06 percentage points more than last week’s rate. In the same period last year, the 15-year rate averaged 2.23%

The current rate on a 5/1 adjustable-rate mortgage with 0.3 points paid is 4.12%, up 0.0.8 percentage points from the previous week. The average rate was 2.55%  last year.

Mortgage rates as of June 13, 2022

To begin the week, borrowers seeking for a mortgage will notice higher rates.

  • A 30-year fixed-rate mortgage now has a rate of 6.418%. 
  • A 15-year fixed-rate mortgage now has a rate of 5.032%. 
  • The current 5/6 ARM rate is 6.522%. 
  • The current 7/6 ARM rate is 6.682%.
  •  A 10/6 ARM currently has a rate of 6.761%.

Money’s daily mortgage rates are based on a national average and reflect what a borrower with a 20% down payment and a credit score of 700 (about the national average) may pay if applying for a house loan right now. The rates for each day are based on the average rate provided to applicants by 8,000 lenders the day before.

 

Factors that influence the mortgage’s monthly payment

Mortgage Insurance:

Mortgage insurance can cost up to 1% of the total value of your home loan every year. Borrowers with traditional loans can avoid paying private mortgage insurance if they put down 20% or have 20% equity in their house. Throughout the life of the loan, FHA borrowers must pay a mortgage insurance payment.

Term of Loan:

Choosing a 15-year mortgage over a 30-year mortgage will boost monthly payments while lowering the total amount of interest paid throughout the loan’s term.

Insurance, taxes, and HOA fees

Premiums for homeowners’ insurance, property taxes, and homeowners’ association fees are frequently included in your monthly mortgage payment. Get an estimate of these expenses from your real estate agent.

ARM vs. Fixed:

Adjustable-rate mortgage rates reset on a regular basis (after an introductory period), and monthly payments fluctuate along with them. Payments on a fixed-rate loan stay the same for the duration of the loan.

 

How long will the current mortgage rate last?

The rising mortgage rates this week will chip away potential purchasers’ purchasing power even further. While some will be priced out of the market, those who are actively looking for a house may profit from a calmer market.

“Mortgage rates climbed again on the strength of rising economic activity and incoming inflation statistics after minimal fluctuation in recent weeks,” said Sam Khater, Freddie Mac’s chief economist, in a statement. “Because the home market is so rate-sensitive, demand is pulling down as mortgage rates rise.” The drop in buying activity, along with the rise in interest rates, has resulted in a significant drop in purchasing activity.

The increased supply of homes for sale will slow price increases to more typical levels, bringing some comfort to those still looking for a home.

 

What is the best way to get the best mortgage rate?

Looking for the best mortgage rate can result in a lower rate and significant savings. According to Freddie Mac, borrowers who get a rate quote from another lender save $1,500 over the life of the loan. If you get five quotes, that number jumps to $3,000.

The best mortgage lender for you will be the one who can provide you with the best rate and terms. One place to look is your local bank or credit union. Over the last decade, online lenders have increased their market share and promise to get you pre-approved in minutes.

Shop around to compare rates and terms, and double-check that your lender offers the mortgage you require. FHA loans, USDA-backed mortgages, and VA loans, for example, are not available from every lender. If you’re unsure about a lender’s credentials, get its NMLS number and look up reviews online.

 

Is the mortgage rate on all types of home loans the same?

No. A conventional mortgage has a different interest rate than an FHA or VA loan. The effective rate, also known as the annual percentage rate (APR), varies depending on your credit score and the amount of down payment you make on each loan type. For example, a borrower with a 620 credit score who puts down 5% on a conventional mortgage loan will have a much higher APR than a borrower with the same score and down payment who gets an FHA loan. This is due to the fact that conventional mortgage insurance (PMI) is based on credit scores and is much higher for borrowers with poor credit scores than FHA mortgage insurance. Which means that a borrower with a 620 credit score will have the same mortgage insurance factor as someone with a 780 credit score.

 

What is the impact of rising mortgage rates on home sales?

 

The number of mortgage applications received fell to its lowest point in 22 years. According to the Mortgage Bankers’ Association, total applications fell by 6.5 percent in the week ending June 3 compared to the previous week (MBA).

  • Purchase applications fell 7% seasonally adjusted from the prior week and 21% year-over-year.

In a statement, Joel Kan, MBA associate vice president of economic and industry forecasts, stated, “The home buying market has suffered from continuously low home inventory and the surge in mortgage rates over the last few months.” “Prospective first-time buyers have been hit particularly hard by these deteriorating affordability issues.”

  • Refinancing applications were down 6% week over week and 75% year over year.

What is the best way to receive a good mortgage rate?

Looking for the lowest mortgage rate might result in a reduced rate and significant savings. According to Freddie Mac, borrowers who receive a rate quote from another lender save an an an average of $1,500 over the life of the loan. If you obtain five quotes, that number jumps to $3,000.

The best mortgage lender for you will be the one that can provide you with the best rate and terms. One place to look is at your local bank or credit union. Over the last decade, online lenders have increased their market share and offer to get you pre-approved in minutes.

 

Shop around to compare rates and terms, and double-check that your lender offers the mortgage you require. FHA loans, USDA-backed mortgages, and VA loans, for example, are not available from every lender. If you’re unsure about a lender’s qualifications, get its NMLS number and look up reviews online.

 

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