The latest mortgage rates and what to consider to get a mortgage now
National 15-year fixed mortgage rates fell slightly from the previous day, reaching 4.10% (4.13% APY). Meanwhile, fixed rates on 30-year mortgages hit 4.88%, but the APY was flat at 4.89%. Over the past few months, rates have tended to climb steadily. You can see the lowest fares you could qualify for here.
What does the future of mortgage rates look like?
Mortgage rates are expected to continue their upward trend, according to economists and real estate professionals who have shared their rate forecasts throughout 2022. Some professionals have even told us that they expect the 30-year fixed rates hit 5% in a month or two. And while rates are still technically considered to be fairly close to historic lows, they have risen sharply since the end of 2021. The upcoming Federal Reserve meeting in May could be a trigger to push rates even higher.
Why is the mortgage rate important?
Rate increases of even as little as 1% can add up to tens of thousands of dollars over the life of a loan. Although mortgage rates can fluctuate over time, it’s important to lock in the lowest rate possible, as your loan payments may reflect the rate for the life of the loan. You can see the lowest fares you could qualify for here.
How to get the lowest mortgage rate
The first thing you’ll want to do to get the lowest rate is get your finances in order and get your credit as high as possible, before getting quotes from 3-5 lenders. This will allow you to compare the rates and terms of different lenders and help you identify the loan that is best for you.
Another thing lenders look for in mortgage applicants is their debt-to-income ratio (DTI) – a number you want to get below 36%, which will lower your chances of being refused a mortgage. To calculate your DTI, divide your monthly debt payments (mortgage, credit card payments, car, student or personal loans, child support) by your gross monthly income. DTI ratios below 36% give lenders peace of mind that you will repay the loan, and they can also work favorably to lower your interest rates. Surprisingly, your DTI carries a lot of weight in the mortgage process and if your DTI number is out of reach of the lender, it’s the number one reason people get turned down for mortgages, NerdWallet research reveals.