The last couple of years haven't been great for people looking to buy a home and get a mortgage.
During the pandemic in 2020 and 2021, mortgage rates significantly declined. However, in 2022 and 2023, they surged due to inflation and the increasing benchmark interest rate. Last summer, they were the highest they'd been since 2000. They've come down a bit since then, but they still need to improve. Presently, the average mortgage rate for a 30-year loan stands at 6.91% as of March 28, 2024, marking a significant increase from previous years.
However, there are still effective ways to secure a favorable mortgage rate today. It might just take a bit more effort and action from you to make it happen. Here, we'll talk about three of the best ways to do it.
1. Keep an Eye on Rates Every Day
Mortgage rates can change every day because of lots of different things. So, the rate you see today might not be the same tomorrow or the day after. While rates usually don't go up or down a lot from one day to the next, it's a good idea to check them every day. That way, you'll know when to lock in a rate that's good for you. Plus, some important events are coming up soon, like an inflation report on April 10 and a Federal Reserve meeting on April 30, that could change rates. So, by staying updated on the daily rate changes, you'll know exactly when to make your move.
2. Be Ready to Act Fast
Since rates change every day, you need to be ready to act fast if you're serious about buying a home. Things like a bad inflation report or an announcement from the Federal Reserve can all make rates go up. So, it's important to be ready to act before any of those things happen. For example, if most experts think rates will go up soon, it's smart to act quickly before that happens. If it turns out rates don't go up, you can always change your mind and lock in a lower rate before you close on your mortgage. But if you're not ready to act fast, you might miss out on getting the best rate.
3. Explore All Your Options
High current rates don't mean you must settle for the average. There are two simple ways to get a lower rate no matter what the market is like. First, you can buy mortgage points, which means paying your lender upfront to get a lower rate. It might cost you more money at closing, but it could save you a lot in the long run by getting you a lower rate. Alternatively, you may explore an adjustable-rate mortgage, wherein the rate fluctuates over time. These usually start with a lower rate than fixed-rate mortgages, but they can go up later on. Still, you usually have a few years before the rate changes, so you can refinance to a fixed-rate mortgage by then if you want to.
*** In addition to that, researching Loan Factory's offerings is also a beneficial method: Familiarize yourself with Loan Factory's mortgage products and terms. Understand the range of rates they offer and any special programs or incentives they provide to borrowers. This approach is also effective in helping borrowers secure a favorable mortgage loan.
In Conclusion
While mortgage rates in spring 2024 may not match those of spring 2022 (or spring 2020), opportunities for securing improved rates still exist. By monitoring rates daily, being ready to act promptly, and considering options such as mortgage points and adjustable-rate mortgages, you can enhance your chances of obtaining a more affordable mortgage. It might not be as low as 3% like before, but it doesn't have to be sky-high either.
