Most clients take out loans to buy their homes. Being knowledgeable on the loan market and process makes agents even more valuable - especially because these loans are so large. Agents can start by learning how the mortgage market works. Then, follow up by learning how to choose the right mortgage, helping clients lock in the best rate, and more. The prolonged low mortgage rates provided some financial relief to homeowners. But, that trend is most likely not going to continue throughout 2022.
According to Money.com, the average rate on a 30-year fixed-rate mortgage fell to 3.76% this week. This rate was down by 0.13% from the average last week. After a series of significant spikes earlier this month, the rate has dropped for the second week in a row so far. The Russian invasion of Ukraine intensified global economic concern. As a result, mortgage rates fell this week. The effects of the crisis in Ukraine are causing market uncertainty. And as mentioned, it has resulted in rates remaining low. This rate may stay low short term but will likely increase in the following months. In this situation, we need to be prepared to take appropriate actions.
When are mortgage rates considered good?
Mortgage rates can vary widely, so knowing the current average rate is essential. The lower the interest rate, the less you will pay in mortgage payments. The rates today can be an appropriate price for buyers. But, depending on finances, the rate clients receive may be greater than expected. Also, it could vary from what lenders advertise or what you find on rate tables. So, if you want to get the most competitive rate, you have to get creative. First, talk to your lender about what buyers can do to boost their chances of getting a better rate. Some possibilities buyers can do are improving their credit score or paying off debt. Remember, we are not just looking for the most affordable mortgage rate. Instead, you are looking for the best mortgage rate and closing costs. Share with clients: Your present financial status and future objectives are unique and exclusive to you. Thus, the best mortgage lender for your neighbor might not be the ideal mortgage lender for you.
When should I lock in a mortgage rate?
It is critical to shop for lenders to find the best mortgage deal, as their rates and fees may fluctuate. Several lenders publish their average interest rates on their websites and rate tables. While looking at rate tables is an excellent place to start, you must still apply for a loan to learn the exact cost. Your credit score, down payment, etc., are all criteria to determine your interest rate. So, it is vital to apply for a loan to get an exact rate quote. When you get approved for a mortgage with an interest rate you like, it is wise to lock in the rate. You can also consult your loan officer or lender about the best time to lock your rate.
Will mortgage rates be maintained or increased?
While there is no way to know when mortgage rates will change, many factors can help you predict this. Economic factors like inflation and the economy influence rates. Furthermore, market uncertainty caused by the conflict in Europe also impacts the market. Individual lenders may also offer lower rates. This situation might be because they are willing to make less money from the loan. Another cause is that their operating costs may also be lower than competitors. Events like this are why shopping around is so important when looking for the best mortgage deal.
Final Thoughts
Getting the best rate is preferable, but the possibility of rising rates should not alarm you. The combination of increasing loan rates and home prices may drive buyers out of the market. Either way, staying informed on the mortgage market will only serve buyers and their agents.
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