Mortgage Rates

April 21, 2015 07:38 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

April 20, 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

On balance, last week's economic news was worse than expected. It may not have been bad enough to directly affect mortgage rates, but it could contribute to a continuing general mood that is friendly to small rises. March figures for industrial production, capacity utilization, housing starts and housing permits all disappointed, while that week's number for initial claims for unemployment insurance also failed to meet expectations. Some relief to the gloom was provided by the builder confidence and consumer price indices, which showed modest rises.

Bad domestic economic news tends to exert an upward pressure on mortgage rates because it pushes investors away from the home loans market and toward U.S. Treasury bonds -- on the not wholly unreasonable grounds the American government is less likely to lose its job and default than individual consumers. So it was no surprise when Thursday's weekly mortgage rate update from Freddie Mac revealed that average fixed-rate home loans inched up last week, with rises for 30- and 15-year terms of just 1 basis point, the smallest measurable amount.

There's little to look forward to in the way of economic data this week. Analysts widely expect March figures for existing home sales (due out Wednesday), new home sales (Thursday) and durable goods (Friday) to be down on the previous month. The good news is that the sorts of poor figures seen recently make it even more improbable that the Federal Open Markets Committee will increase rates when it meets next week. Few expected that anyway, though some were anticipating a June date for the first lift. Some time even later in the year looks increasingly likely.

Of course, it's not just economic data that affect rates. Among other factors are supply and demand. So, Wednesday's Mortgage Bankers Association weekly survey was welcome for those hoping for cheaper mortgages. It revealed a fall of 2.3 percent in mortgage loan application volume during the seven days ending April 10.

It's worth noting that many believe recent bad economic data have been largely caused by exceptional factors (not least the bad weather in March), and that the underlying economy is continuing to recover well, though the strong dollar is worrying. Partly because of this, few expect significant or rapid changes in mortgage rates within the scope of these rate lock recommendations.

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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