You can read the long winded stuff below or focus on the simple facts.
Mortgage rates have dropped, demand will jump. Buy now for best deal!
As of December 14, 2023, mortgage rates have remained relatively stable, with a slight dip in the average rate for a 30-year fixed mortgage to 7.48%, down from 7.56% the previous week. For those aiming for quicker home loan payoff, the average rate on a 15-year fixed mortgage has decreased to 6.63%, reflecting a 0.12 percentage point drop.
Considering refinancing to secure a lower rate? It’s crucial to compare your current mortgage rate with prevailing market rates to assess the potential cost and benefits.
Here’s a breakdown of the current rates:
- 30-Year Fixed Mortgage: 7.48%, down by 0.08 percentage points from the prior week. The Annual Percentage Rate (APR) is 7.37%.
- 15-Year Fixed Mortgage: 6.63%, down from 6.75% last week. The APR is now 6.58%.
For a $100,000 loan with a 30-year fixed rate of 7.48%, the monthly payment, according to Forbes Advisor’s mortgage calculator, is approximately $698, accumulating to around $151,150 in total interest over the loan’s lifespan.
Jumbo mortgage rates have seen a modest decrease, with the current average rate for a 30-year fixed jumbo mortgage at 7.45%, down by 0.09 percentage points from the previous week. Monthly principal and interest payments for a $750,000 jumbo mortgage would be approximately $5,218.
Factors influencing mortgage rates include the Federal Reserve’s decisions, the bond market, economic health, and inflation. Borrowers can optimize their rates by focusing on factors such as credit score, debt-to-income ratio, loan-to-value ratio, loan term, and residence type.
There are various mortgage loan types available, each with its advantages:
- Conventional Mortgage: Ideal for those with good credit and a minimum 20% down payment.
- FHA Loan: Suited for those with imperfect credit or a low down payment.
- VA Loan: Flexible for borrowers with qualifying military backgrounds.
- USDA Loan: Applicable in eligible rural areas with no down payment required.
- Jumbo Loan: Necessary for homebuyers in high-cost-of-living areas exceeding conforming loan limits.
Looking ahead, the Federal Reserve’s signal of potential rate cuts in 2024 may lead to further decreases in mortgage rates. While inflation has slowed, home equity lines of credit (HELOC) can be an option for leveraging home equity during this period of rate adjustment.
Despite some fluctuations, home prices are expected to see moderate increases in the coming years, influenced by mortgage rates and overall market demand. Homebuyers are encouraged to use mortgage calculators to determine affordability based on their income and budget constraints, considering the potential impact of interest rates on their borrowing capacity.
