Mortgage Market Insider
Rates surged again this Monday and are now at 52-week highs. The 30-year fixed rate mortgage hiked up 19 basis points to 6.47% while the 15-year mortgage moved nearly double this amount— a whopping 34 basis points, putting it at 5.78%.
Why are rates so high right now? The short answer is that bonds and stocks have been selling off. The long answer involves the Fed’s bond buying programs, which had been a major source of downward pressure on rates and which ended on September 15th. Rates are also high because they’ve already priced in today’s Fed meeting in which they anticipate a 75 or 100 basis point rate hike. To put this into perspective, a hike of this magnitude hasn’t been seen since 1994 and 1982 respectively. Additionally, the market will inevitably have a reaction to the updated dot plot, which shows where each Fed official believes the Federal Funds rate will fall over the next three years and in the longer run. In housing news, the best time to make a purchase is almost nigh. The last week in September is known to be the best statistical time in the entire year to buy a house; buyers stand to save $20,000 on their purchase. This is because home prices typically decline in the second half of the year, and buyer demand also softens as families settle in for the holidays.
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Frequently asked questions
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Yes and no. It will not hurt your credit to see your initial estimates. But, it will ding your credit by a handful of points when you complete a loan application.
How it works: any time that you apply for credit, it lowers your credit score a little bit. However, when you’re applying for a home loan, you have a window of opportunity to shop around without additional hits to your credit, which is how we’re able to provide you multiple offers without added impact.
Also: when you complete our initial application, you’re not actually applying for a home loan yet. You’re simply browsing your home financing options. So, this is risk-free.
Yes, absolutely. We don’t charge anything for our service, so no origination fees or mark-ups on your rate. Note: there are still costs associated with getting a mortgage, such as appraisal fees and lender fees, all of which will be detailed in your loan estimate.