By Robbie T. James
Applying and qualifying for a home loan is something that you want to try to time as well as you can. Most mortgages are 30-year, fixed-interest loans. This means that the day you apply for the loan and receive an offer for a particular rate is a very important one; this rate will affect your pocketbook for a long time to come.
When looking to refinance a home mortgage or to move into a new home, it is understandable that you would want to make sure you are getting it right in terms of timing. It would be an unfortunate situation if either:
a. you waited an extra month, only to find that rates had started to climb back up, or, at the other extreme,
b. you signed the papers for a new mortgage loan today, only to learn that a month or two later the rates dropped even more
Every smart homeowner (or homeowner-to-be) understands that getting the lowest rate is desirable. But, timing the mortgage interest rate market accurately is no easy task.
If you are interested in a mortgage rates forecast, here 5 tips to help you get the best rate:
1. Fixed mortgage rates reflect ongoing changes in Treasury note yields:
It is helpful to learn how mortgage rates are determined. In the case of fixed interest rate mortgages, the daily change upward or downward in available interest rates is directly influenced by the yield on something called a Treasury note (or T-note). Reason: T-notes and mortgages are two of the safest-possible investments a person can make, with T-notes being slightly less risky.
2. Adjustable-rate mortgage rates reflect changes in the fed funds rate:
Similarly, adjustable rate-mortgage rates are directly influenced by the fed funds rate, which is the interest rates that banks use to give each other short-term loans.
3. Nobody can predict mortgage rates:
Clearly, both of these factors (T-notes and fed funds rate) are outside of the control of any single market player or investor, making it impossible to predict or influence future trends in interest rates.
4. A good indicator for where rates are going is to look at historical trends:
However, you do have the ability to remain informed about the significance of today’s interest rates by looking at how they trend over time. Have a look 1-month, 3-month and 1-year rate trends and see how today’s rate compares. You can at least get a sense of where the rates are today, which can help you make an informed decision about when to apply.
5. Remember an additional layer of influence you have:
All of the discussion thus far has addressed average interest rates. However, the rate for which you qualify is also a function of the individual lender with whom you apply, as well as your credit score. Be sure to apply to at least 5 lenders before deciding upon one, in order to get yourself the best rate.
As you look for a mortgage rates forecast, consider these 5 tips for qualifying for the best-possible rate.
Contact Southpoint Financial today!