Mortgage Rates

July 5, 2015 05:25 AM Eastern

Refinance rates now in Woodbridge, NJ[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

July 2 2015
  •   Lock if closing in 7 days:
    Rates may be heading up
  •   Lock if closing in 15 days:
    Rates may be heading up
  •   Lock if closing in 30 days:
    Rates may be heading up

The domestic economic data published this morning suggest a continuing recovery -- but a slow and patchy one. This is probably good news for those who prefer their mortgage rates low (they often tend to rise when the economy's expanding rapidly), but others might wish to see a stronger and more consistent return to growth. Today's employment situation figures were fine: total nonfarm payroll employment increased by 223,000 in June, and the unemployment rate ticked down to 5.3 percent. However, they weren't as good as most analysts had hoped. Meanwhile, initial claims for unemployment insurance increased by a seasonally adjusted 10,000 during the week ending June 27. The factory sector is still struggling to find its feet, and new orders in June fell by a full 1.0 percent. That was the ninth month in the last 10 that saw falls.

Ten-year U.S. Treasury bond yields rose again yesterday to close at 2.43 percent. That's its third highest level in a month, which suggests investors have shrugged off continuing scary news from Greece and recent poor data from emerging economies.

Those yields are important because there's a close relationship between 10-year U.S. Treasury bonds and mortgage rates. And when bond yields rise or fall, mortgage rates almost always follow, though sometimes after a short delay.

Freddie Mac published its weekly survey of average mortgage rates this morning, and that for a 30-year fixed-rate mortgage during week ending July 2 was 4.08 percent with an average 0.6 point. The same rate was 4.02 percent (0.7 point) during week ending June 25, and 4.00 percent seven days before that. This was the fourth consecutive week during which that particular rate began with a "4," and those commentators who predicted it might be a very long time before a "3" is seen again in that spot are looking increasingly prescient.

Freddie chief economist Sean Becketti observed, "Overseas events are generating significant day-to-day volatility in interest rates. Nonetheless, the week-to-week impact on most rates was modest."

Forecasting the direction of mortgage rates is difficult at the best of times. Something that might be expected in some circumstances to push both them and bond yields up can in others exert a downward force -- and vice versa. Those forecasts are especially perilous when the future prospects of economies around the world are so hard to judge, and volatility is a feature of most markets. However, absent more shock developments, few expect large changes in mortgage rates within the scope of these rate lock recommendations.

There won't be a post in this space tomorrow, because markets are closed for the Independence Day weekend. Everyone at LendingTree hopes you have a very enjoyable break.

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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