Just like the housing prices, the mortgage rates started to roller coaster.
In June, the national average rate for a 30-year fixed conventional loan, across hundreds of lenders, was 5.47%. Two weeks later, the Conventional loan rate spiked, reaching 6.28%, an incredible leap of over 0.75%
In August, rates bounced around quite a bit (between 5.00% and 5.50%) for the first two weeks, and then most recently climbed up to 5.95% (August 30th)
After grabbing headlines, rates quickly came back down in early July (around 5.50%) and fell again by early August (5.05%)
Buyers who had chosen a lender with a free float down policy were overjoyed.
Rates had actually only risen by about 0.50% overall by the end of August. But for a 30-year loan of $400,000, that’s $120 extra per month ($2385 vs. $2264).
Rates rising to curb inflation, but making a mess for home buyers.
Homes are still affordable for many buyers … inventory is up, and buyers have more choice and bargaining power than they did back in June.
What about qualifying for a mortgage? Have lenders made that harder? Short answer, no. Higher rates and property taxes do take their toll, but the underlying lender requirements are not tighter themselves. Lender pipelines are dry, with all the refinances gone. If a loan meets investor criteria (set by Fannie, Freddie, a private investor for Jumbo, or the FHA/VA/USDA guidelines), then dozens of lenders want that loan to close with them… lenders are now in bidding wars to win new closed loans…
Lenders are still qualifying FHA borrowers, as they always have, with a 600 FICO credit score (and sometimes 580) with only a 3.5% down payment.
Check rates with at least 3 lenders befoer you choose the best for you, and be sure to get fully pre-approved before you write an offer (and even then, the lender might deny if the pre-approval wasn’t done properly). Your Realtor will also be adamant about that, as no one wants to waste effort on something that won’t fly.
So, what do Buyers need to know about mortgage rates today? “Owning a home today will cost a bit more than back in June ($75 – $150/month, depending on the loan amount) unless we find a lender with a lower rate…compare a few lenders to make sure you get a good deal.”
Below are three solid choices to check out in your mortgage search. Encompass Lending is Fathom owned and has some fantastic loan officers & many programs to fit anyone.
Grayson County and more. Range of loan types & friendly
FATHOM Realty’s lender of choice. Friendly & responsive.
Novus Home Mortgage
Gail Hillman’s experience & Team will wow you!
NOTE: Texas law requires ALL real estate licensees to give all consumers who initiate real estate transactions the following information about real estate services: