Hike rates

Mortgage of the day, refinancing rate: March 18, 2022

the


Federal Reserve

concluded its highly anticipated meeting this week where it announced it would raise the target federal funds rate for the first time since 2018.

Over the past 12 months, the consumer price index has increased by 7.9%. In order to fight inflation, which it usually tries to keep around 2%, the Fed raised its key rate by a quarter of a percentage. He predicts a total of six more increases are coming in 2022.

In response to high inflation, the Fed ended its COVID-era policies, which were originally put in place to reverse the economic damage caused by the pandemic. This liquidation includes reducing its asset purchases and increasing the federal funds rate. Mortgage rates are rising accordingly, and they will likely continue to rise slightly through 2022.

Today’s Mortgage Rates

Today’s Refinance Rates

mortgage calculator

Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments:

mortgage calculator

$1,161
Your estimated monthly payment

  • pay one 25% a higher down payment would save you $8,916.08 on interest charges
  • Lower the interest rate by 1% would save you $51,562.03
  • Pay an extra fee $500 each month would reduce the term of the loan by 146 month

By clicking on “More details”, you will also see the amount you will pay over the life of your mortgage, including the amount of principal versus interest.

How do mortgage rates work?

A mortgage interest rate is the fee charged by a lender to borrow money, expressed as a percentage. For example, you get a $300,000 mortgage with an interest rate of 2.5%.

Mortgage rates can be fixed or adjustable. A fixed rate mortgage keeps your rate the same for the life of your loan. A variable rate mortgage fixes your rate for the first few years or so, then changes it periodically. With a 7/1 ARM, your rate would remain stable for the first seven years and then change every year.

The longer your mortgage term, the higher your rate will be. For example, you will pay more for a 30-year mortgage than for a 15-year mortgage. However, longer terms come with lower monthly payments because you spread out the repayment process.

How to get the best mortgage rate?

Here are some steps you can take to get the lowest mortgage rate possible:

  • Consider fixed rates versus adjustable rates. You may be able to get a lower introductory rate with an adjustable rate mortgage, which can be beneficial if you plan to move before the end of the introductory period. But a fixed rate might be better if you’re buying a house forever, because you don’t risk your rate going up later. Examine the rates offered by your lender and weigh your options.
  • Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to increase your credit score or reduce your debt ratio, if necessary. Saving for a larger down payment also helps.
  • Choose the right lender. Each lender charges different mortgage rates. Choosing the right one for your financial situation will help you get a good rate.

How to choose a mortgage lender?

First, think about the type of mortgage you want. The best mortgage lender will be different for an FHA mortgage than for a VA mortgage.

A lender should be relatively affordable. You shouldn’t need a very high credit score or down payment to get a loan. You also want them to offer good rates and charge reasonable fees.

Once you’re ready to start shopping for homes, get pre-approved with your top three or four choices. A pre-approval letter indicates that the lender wants to lend you up to a certain amount, at a specific interest rate. With a few pre-approval letters in hand, you can compare each lender’s offer.

When you apply for pre-approval, a lender does a credit check. A bunch of tough inquiries on your report can hurt your credit score, unless it’s to hunt for the best rate.

If you limit your rate purchases to about a month, the credit bureaus will understand that you’re looking for a home and shouldn’t hold each individual claim against you.