Mortgage Rates

March 27, 2015 11:37 AM Eastern

Refinance rates now in Ashburn, VA[Change this]

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Home Price (Purchase)
When you get a mortgage to purchase a home, the lender uses the lower of the agreed-upon purchase price or the property's appraised value to determine your maximum loan amount. The loan amount divided by the property home price equals your loan-to-value ratio, or LTV. That ratio is one of the major factors that lenders use to set your mortgage rate. If your LTV exceeds 80 percent, you'll probably be required to pay mortgage insurance, which increases your monthly payment. If the property appraises for less than the agreed-on purchase price, you are not usually required to complete the purchase.
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Home Value (Refinance)
This is your estimate of the current value of your property. When you refinance, your home is almost always evaluated by a licensed appraiser. The refinance loan amount divided by the property's appraised value equals your loan-to-value ratio (LTV), and that number is one of the major factors that determine your mortgage rate. To get an accurate refinance rate quote, your home value estimate must be reasonably accurate.
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Down Payment
The down payment is the amount you pay upfront when you finance property. Your purchase price minus your down payment equals your mortgage amount. The higher your down payment, the more likely you are to be approved for a home loan. If your down payment is less than 20 percent of the purchase price, you'll probably be required to pay for mortgage insurance, which increases your monthly payment.
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Credit Score
Your credit score is a number designed to measure your credit-worthiness. It's based on a formula that combines many factors, including your payment history, amount of credit used and number of accounts. This number is used by lenders to calculate the probability that you'll default on your mortgage. Most lenders won't approve mortgages to applicants with credit scores lower than 620. Your credit score is one of the most important factors that determines your mortgage rate - applicants with higher scores are offered better mortgage rates.

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Mortgage rate quotes displayed on LendingTree LoanExplorer℠, including loan pricing data, rates and fees, are provided by third party data providers including, but not limited to, Mortech®, a registered trademark of Zillow®, LoanXEngine, a product of Mortgage Builder Software, Inc., and LoanTek, Inc.

Mortgage Rate Trends

Monthly | Daily

Mortgage Rate Lock Recommendation

March 25, 2015
  •   Lock if closing in 7 days:
    Rates are down
  •   Lock if closing in 15 days:
    Rates are down
  •   Lock if closing in 30 days:
    Rates are down
  •   Float if closing in 45 days:
    Rates are up
  •   Float if closing in 60 days:
    Rates are up

Interest rates this morning have already improved, gotten worse, and improved again. Yields on ten-year Treasury Notes have settled in at 1.88 percent, well below the benchmark 2.0 percent mark, and the Dow is down over 200 points. There should be a small improvement in this morning's mortgage rates; closing costs should be about .125 percent lower, saving $125 for every $100,000 financed. It would also not be surprising to see mortgage improve a bit more if this morning's trend continues.

The Economy

February's Durable Goods Orders report from the Commerce Department revealed a 1.4 percent drop in new orders for big-ticket products. Because analysts had predicted a small increase, this report was favorable for bond rates and mortgage pricing. It's not one of the more heavily-weighted reports, however, and it's known to be fairly volatile, so its impact was not overwhelming.

The first of two Treasury auctions takes place today, and its results will be posted early this afternoon EDT. The results could change the direction in which mortgage rates are trending; if demand is strong, it could push rates solidly lower, while a lackluster performance might push rates up this afternoon.

Today's auction consists of five-year Notes and tomorrow's will feature seven-year Notes. If demand is weak, there is likely to be broader selling in the bond and mortgage-backed securities (MBS) markets and repricing for worse by mortgage lenders. However, robust demand for bonds usually makes MBS more attractive to investors and pulls mortgage rates lower.

Tomorrow

In addition to a Treasury auction, tomorrow brings the usual weekly unemployment figures. Being weekly numbers, their influence is limited. Analysts expect that 290,000 new claims for unemployment benefits were filed last week. More than that would be good for rates, and smaller numbers can push rates up.

What Does it Mean to "Lock" Your Mortgage?

"Locking" your mortgage means that you and your lender have agreed on an interest rate and price for your home loan. Once your loan is locked, that's the rate and price you get, regardless of what happens in the financial markets. If rates go up, you're protected but if rates go down, you won't benefit either -- you close your loan at the rate you've locked and you can’t change it. Locks have expiration dates ranging from 30 to 60 days or more, and the longer your lock period, the more it costs. If you don't close your loan on time, you could end up paying a higher interest rate.

When Should You Lock?

You can lock in your loan at any time during the process. Until you lock your interest rate, you are said to be "floating" your mortgage. The only rule is that you have to lock in before you can close on your purchase or refinance.

The decision to lock or float your loan can have a long term impact so it’s important you make the right choice. That’s why we offer a quick rundown of the key factors that drive mortgage rates today and everything you need to know.

Mortgage Rates by State

Mortgage rates can vary a lot between lenders on any given day. So, if you only get one mortgage quote, you won't have any idea if there's a better deal out there. That's why the best way to get a mortgage rate it to request quotes from multiple lenders and compare interest rates, loan terms and closing costs. It puts you on in charge and keeps the banks competing to get you the best rate possible. Remember, even .1 percent can amount to thousands of dollars over the course of a loan. Make sure you shop around!

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