Though today’s mortgage rates are both affordable and low, they’re expected to rise in 2020.
Original predictions placed mortgage rates going up in 2019. Instead, the average APR for a 30-year fixed-rate mortgage dropped from 5.09% to 4.09%. That makes now the prime time to buy a home.
Top mortgage lenders are currently offering a variety of products and services. The 30-year mortgage remains the most popular option for new home buyers. Over 90% of home buyers choose this exact loan.
Mortgage rates can be confusing. Everywhere you look there’s a different rate advertised.
In this article, we’ll boil down the numbers for you and analyze the national averages. Then you can make a more informed decision on what best meets your needs.
What Are Today’s Mortgage Rates?
The average 30-year fixed home mortgage averages 4% interest annually.
While most rates tend to fall right around this number, some range as high as 7.8%. The advantage of a fixed-rate is it will not increase, so it offers stability for home buyers. This loan is the standard and most first-time buyers wisely choose it.
The rates change as we go into other types of mortgages.
For example, a 15-year fixed mortgage averages 3.06%. This has the potential to save you thousands of dollars by the time you pay off your house. The downside is that monthly payments are much higher.
Another popular option is the 5/1 ARM. These adjustable-rate mortgages seem complicated at first, but really aren’t.
A 5/1 ARM means that for the first five years, you’ll lock the interest rate, which currently averages around 4%. After the five-year period, once a year, the interest rate might go up or down depending on different factors. This is a good option for those not intending to live in the home they are purchasing for an extended period.
There are also certain factors to take into consideration which affect mortgage rates.
Supply and demand drive mortgage rates. Multiple factors play a part in determining the final rate. Some are events outside of your control, such as inflation or the state of the economy.
Other factors you can control, like your credit score. The better your credit score, the better of a deal you’ll get on your interest rate.
A trusted mortgage advisor, like Fairway Mortgage, will offer various loan types like those listed and even have an option for down payment assistance.
The Time to Act Is Now
Today’s mortgage rates are competitive and affordable but are set to rise higher in the near future. It’s predicted that home buying in 2020 will break previous records. If that happens, interest rates will go up.
As more millennials reach the age of thirty, the housing market is set for a boom. If the dream of homeownership has always been yours, and while interest rates stay low, you might want to act now.
To reach the neighborhood you’ve always wanted, and to have the home of your dreams, get with a top-rated mortgage institution. We invite you to read more articles on our blog to learn more about real-estate!