Home Sweet Home: Lock in Mortgage Rates Now


Home Sweet Home: Lock in Mortgage Rates Now

by Amy Lignor


It is well known that mortgage rate trends are inherently unpredictable, much like stock prices. But even non-experts out there do a highly good job guessing where rates will go when looking forward to the rest of the year. The fact that never changes, however, is that with a hot economy and rising inflation, rates will not go down. Thus, what homebuyers and refinance candidates can hope for is that they lock in today’s rates before they rise.

This is also definitely the right time period to purchase a home. Shopping in the months of November through January, when school is in session, is what experts advise. Luckily, thirty-year fixed rates are still in the 4s (October 8th, 2018), which was actually considered an impossible range only a few short years ago.


The mortgage rate forecast for 2018 has been on target, with most major housing and financial authorities predicting rates would fall between 4.7% and 5.0% for 2018. Freddie Mac stated that the average 30-year fixed rate for an ideal candidate jumped to 4.72% at the end of September. The good news is that these experts also stated there will likely be no more “jumps” for the remainder of the year.


Barring a tragedy, the American economy appears to be unstoppable. Good for the unemployment rate, which is very low at 3.9%, but bad for mortgage rates. This is definitely a “worker’s market,” and with this good economy, inflation will rise as companies pay more to hire and retain workers. To put it simply, purchasing or refinancing in the next three months is a good choice to make so that these current rates can be locked in as fast as possible before the 2019 rates come into play.


For homeowners who want to refinance, but decide to wait, then waiting for what experts say will be a 2020 rate drop might be worth the wait. For a homebuyer, however, that waiting game could backfire. It is not out of the realm that home prices could be 10-20% higher by 2020, thus negating any rate savings you could get today. Therefore, if you are “mulling” over the idea of purchasing a home, today’s rates will most likely be the best you see for years to come.


In addition, don’t automatically throw out the idea of a cash-out refinance opportunity. It is a fact that homeowners have built up a good amount of home equity in recent years. (*According to Statista, U.S. homeowners are sitting on more than $14 trillion in equity.) These same owners, however, are meeting up with roadblocks when it comes to tapping into that equity, which means a home equity line of credit (HELOC) is the fast, convenient way they’ve chosen to retrieve some cash. Not only does the HELOC have low closing costs, but you do not have to touch your first mortgage in order to get one.


There are upsides and downsides to the HELOC that you should be aware of before taking that path. This refinance replaces your first mortgage and gives you cash back for the new loan amount that exceeds your old one. This will give you a potentially higher rate, plus additional closing costs. On the upside, this cash-out refinance will limit your exposure to a Federal Reserve that is determined to raise rates, which they will most certainly do. Home equity rates are adjustable and rise every time the Fed hikes rates. But a 30-year fixed cash-out loan payment never changes.


Now is a great time to purchase that Home Sweet Home you love; or, refinance. Either way, the goal is to lock in today’s rates and avoid added risks that are sure to be coming in the near future.

When looking for loans, whether buying or refinancing, sites such as, Freddie Mac and Ellie Mae will break down a variety of options, offering overviews that will lead you in the right direction. In addition, to get a synopsis of what’s happening in regards to daily mortgage rates and lock-in recommendations, head to https://themortgagereports.com



Original Source:  BaretNewswire.com




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