You might be thinking that now isn't a great time to be considering buying a house, thanks to the uncertain economic conditions brought on by COVID-19.
However, current mortgage rates are the lowest they've been in years, and if you are financially stable, it might be a great time to buy a house.
To learn more about current mortgage interest rates, read on.
What Is a Mortgage Rate?
Mortgage rates refer to the interest rate that a home loan, called a mortgage, has. These rates take into account several factors, including mortgage bond rates and the demand for mortgage bonds.
The rates vary based on the cost of the home (jumbo loans often have higher interest rates), the type of mortgage (e.g., FHA loan vs. a VA loan), the credit profile of the buyers, and the length of the loan (15 years vs. 30 years).
What Are the Current Mortgage Rates?
Mortgage rates can change daily, but day-to-day changes won't be significant. There are many resources out there to discover when you can get the best rate and places where you can always check the daily rates.
You should also shop around to see who will give you the best rate and the best mortgage terms, as not all loans are created equal. As of June 2020, current mortgage rates are as low as 3.0% for a 30-year fixed-rate mortgage.
For FHA loans, the current mortgage rate is 3.1%, and for VA loans, the rate is even lower, at 2.75%.
However, these rates are subject to change, so it's important to shop around for the best rate. Once you find it, lock it in.
Most lenders will lock in the mortgage rate for a certain period, often 30 to 45 days. This means that no matter what happens with rates, yours cannot increase. The longer your lock term, the higher your rate.
How to Get the Best Rate
Getting the best mortgage rate is a matter of timing, a good credit score, a solid down payment (in some cases), and shopping around for rates.
If you have a low credit score, you may want to spend some time improving it before applying for a mortgage. Some lenders won't even consider you if you don't have a certain credit score, and you'll pay a higher rate if you have a lower score.
If you have debt and the government employs you, you might consider different loans for government employees and save yourself money with a low-interest installment loan.
Are You in the Market to Buy a House?
Although inventory is down in many places across the country, it's still a seller's market in many places. Current mortgage rates are so low that you might be able to get a more expensive house within your budget parameters, as your monthly payment will be lower.
Once you find your new home and lock in your mortgage rate, be sure to come back for more valuable content on moving, decorating, and home maintenance tasks to keep your house in top shape.