Mortgage rates jumped to 3% for the first time in a month.
Mortgage rates have made small movements this month, ranging from 2.94% to 3%. So overall, today’s mortgage and refinance rates are quite low. With competing factors pushing and pulling rates, some experts don’t expect big fluctuations in the near future.
Mortgage rates are higher than they were at the beginning of 2021, but still favorable for borrowers. “These are phenomenal rates. Don’t let great be the enemy of outstanding,” says Elliot Eisenberg, PhD, president and chief economist with the economic consultancy GraphsandLaughs, LLC. So even though rates aren’t at the bottom we had in January 2021, you can still use the current mortgage rates to your advantage.
Right now, a $300,000 30-year loan would cost $168 less a month and you’d save $60,000 in interest compared to getting the same loan just two years ago when rates were roughly 1% higher.
But before you jump for a low rate with the first lender you come across, there are factors beyond your mortgage rate to consider when you’re buying a home or refinancing.
What You Need Know to Get the Best Mortgage for You
Choosing the best home loan is about getting the lowest interest rate, while paying the smallest amount of fees.
“So many times I think consumers are misled in some of the advertisements … a lot of times they’re not reading the small print,” says Jennifer Kouchis, senior vice president of real estate lending at VyStar Credit Union. “They’ve got to look at everything, overall, and what’s being offered.” Two home loans could have the exact same interest rate, but one offer could include thousands of dollars in extra fees, such as discount points.
So if you find yourself wanting to take advantage of low rates, make sure to shop around for the best mortgage lender. To accurately be able to compare offers you’ll need to submit a full application, not just get a mortgage preapproval, with each lender you’re considering. Within three business days of getting your application lenders are required to provide you with a standardized form known as a Loan Estimate.
Your Loan Estimates will detail the rates, fees, and terms for each loan, so you can more easily compare offers. When looking at fees, pay special attention to the origination or lender charges, interest rate, and annual percentage rate (APR), which factors in certain fees along with the interest rate.
Keep in mind, you need to compare apples to apples. So the loans should have the same repayment term (15-year mortgage, 30-year mortgage, etc.) and be the same type of mortgage (FHA loan, VA loan, conventional loan, etc.).