Mortgage Rates

June 29, 2017 12:09 PM 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

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Mortgage Rate Lock Recommendation

June 29, 2017 - Lock

Today's Outlook

It looks as if mortgage rates might rise again today – perhaps significantly this time. However, that forecast is based on early market trends and those frequently change speed or direction during the day. So a holding steady or even a fall remain possible. Our prediction could be undermined in coming hours by economic, political, and geopolitical news that might affect the U.S. and global economies, including:

  • This morning's domestic economic data. The third estimate of Q1 GDP was raised, exceeding expectations. The much less important weekly figures for new jobless claims were only slightly worse than expected.
  • A lunchtime (ET) speech by St. Louis Federal Reserve Bank president James Bullard.

If we were currently buying a home, we would lock our rate now, particularly if we had to lock anyway within the next couple of weeks. Read on to discover why you might prefer to float.

Average rates for 30-year fixed-rate mortgages edged up yesterday for a second successive day. They are now back to their highest in the last month. However, June has so far seen only small rate movements within a narrow band, so yesterday's level was not that much higher than the eight-month low set on June 14. They could fall again but there is no guarantee of that. If you glance at the chart above, you will see a firm downward trend since March. However, as always, what happens next will depend on whether relevant news becomes more or less positive in coming days. Absent other factors, good news tends to push mortgage rates up, while bad news usually pulls them down.

Some experts would urge you to lock now, particularly if you are going to have to lock anyway within the next few weeks. Others might suggest you continue to float (though perhaps with less conviction today) on the grounds that:

  • There might be more political and economic turmoil ahead.
  • Recent economic data have been insufficiently impressive to create an expectation of significant upward momentum.
  • Most rate watchers seem to be predicting only small rises this year. And, so far in June, mortgage rates have moved within a narrow range.

But neither group of experts has a crystal ball and there remains a real possibility of volatility. So, either way, you are taking a chance. Only you can decide on the level of risk with which you are comfortable.

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 Types

The type of mortgage you get will affect the type of mortgage rate you qualify for. See below for the most common types of mortgages and what rates you could be eligible for.

Conventional Mortgage

A conventional mortgage is one that is not insured by a government agency, such as HUD/FHA. It's typically a fixed-rate 30-year loan and the buyer must put down at least 20 percent of the purchase price of the home to qualify. Conventional mortgages typically come with excellent mortgage rates because of the down payment and stringent credit score requirements.

FHA Mortgage

FHA mortgages are perfect for buyers with less than 20 percent down, a less-than-ideal credit score or first-time home buyers. Since these loans are backed and insured by the federal government, lenders are able to offer low, competitive rates to buyers. You can view current, up-to-date rates from our top-rated FHA lenders to see what type of rate you'd be eligible for.

VA Mortgage

VA mortgages are reserved for veterans, active-duty personnel, Reservist/National Guard members, and their eligible surviving spouses. VA loans are incredibly attractive to those that qualify because of their no down payment requirement, no mortgage insurance premiums, low closing costs and low, negotiable interest rates.



Mortgage Process

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How Much House Can I Afford?

Use our Home Affordability Calculator to see how much house you can afford. Simply plug in your gross annual income, down payment amount, monthly debts and credit score. Our calculator will give you a range of conservative home prices up to aggressive ones.

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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