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Here Are Today's Mortgage Rates, June 16, 2022 | Rates Fall

Why homes could get cheaper, but less affordable
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Jason Stauffer is a journalist based in Chicago covering personal finance for NextAdvisor. His previous work includes…

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Common mortgage rates ticked down slightly after the Federal Reserve raised its benchmark short-term interest rate by 75 basis points Wednesday. The average 30-year fixed mortgage rate backed away from 6% somewhat.

The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:

The pandemic initially drove rates down when it caused economic activity to drop. As a result of the pandemic, disruptions to the global supply chain caused shortages, which increased inflation and interest rates.

We may soon find ourselves in the reverse situation, where factors contributing to inflation could slow economic growth. Sagging economies tend to be accompanied by lower mortgage rates.

However, this forecast is far from certain and right now it appears that rates may move around from week to week, but aren’t expected to drop. The impact of the Russian invasion of Ukraine and the Chinese COVID lockdown on supply chains will likely lead to higher inflation.

As long as inflation lingers, the chances of returning to the glory days of low mortgage rates stay slim. “Until inflation is under control, the risk is certainly that rates move higher,” Danielle Hale, chief economist at Realtor.com told NextAdvisor.

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High prices and rising interest rates are being felt by homebuyers, who are seeing their purchasing power dwindle.

Buying a house at this time is not the wrong move, but panicking at this point is a mistake. Don’t rush into a home purchase because you’re afraid rates or prices will increase forever. Instead, if it’s the right time for you to purchase, then take the time to find the right home for you at a price you can afford.

Owning a home is a better choice if you plan on staying for a long time. You can survive the inevitable fluctuations in the market by keeping the home for a longer period of time. Be sure to stick to your homebuying budget and only purchase a home you can comfortably afford. According to experts, you shouldn’t spend more than 28% of your pretax income on housing.

Compared to 2020 and 2021, today’s rates are higher, but looking at prior years they aren’t outside of normal ranges. This means that your mortgage rate doesn’t have to derail your plans to become a homeowner.

Data collected by the government-sponsored entity, Freddie Mac, is shown in the above chart. Typically NextAdvisor references mortgage rate data compiled by Bankrate. The rates in this chart differ slightly from the data elsewhere on this page, the historical trends generally track with each other. Looking back at Freddie Mac historical rates offers a good snapshot into how today’s rates compare with the past two decades.

The industry term for the upfront fees you pay when you get a home loan is closing costs. The fees for your appraisal, title insurance, and any lender origination charges are all part of your closing costs. These fees vary depending on the size of your loan, but are usually 3% to 6% of your loan balance. Paying attention to the closing costs you pay is important because the higher your closing costs, the higher your annual percentage rate (APR) will be.

Refinance rates grabbed headlines today. We saw an astonishing increase in rates for 30-year fixed loans. Interestingly, 15-year fixed-rate refinances moved in the opposite direction and dropped off. If you’ve been considering a 10-year refinance loan, just know average rates also inched up.

The refinance averages for 30-year, 15-year, and 10-year loans are:

Check out mortgage rates that meet your distinct needs.

For a 30-year fixed-rate mortgage, the average rate you’ll pay is 5.91%, which is an increase of 37 basis points from seven days ago.

The median rate for a 15-year fixed mortgage is 5.11%, which is an increase of 36 basis points from the same time last week.

A 15-year, fixed-rate mortgage’s monthly payment is larger than what you would pay with a 30-year mortgage. However, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much faster.

A 5/1 ARM has an average rate of 4.02%, which is an uptick of 11 basis points from the same time last week.

An adjustable-rate mortgage is ideal for households who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being noticeably higher after a rate adjusts.

For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Keep in mind that your payment could end up being hundreds of dollars higher after a rate adjustment, depending on the terms of your loan.

We use Bankrate’s daily rate data for our mortgage rate trends. These overnight rates are based on a specific personal financial profile, which only includes loans for single-family homes with a loan-to-value ratio of 80% or better. Bankrate is part of the same parent company as NextAdvisor.

The table below compares today’s average rates to what they were a week ago, and is based on information provided to Bankrate by lenders from across the nation:

Rates accurate as of June 16, 2022.

Use NextAdvisor’s mortgage calculator to see how your monthly mortgage payment changes based on causes like your interest rate, homeowners insurance, and property taxes.

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Shopping around for a home loan is a great way to get the lowest mortgage interest rate.

Your mortgage rate depends on a number of factors lenders consider when assessing how risky it is to give you a mortgage. Your credit score factors into the decision. And your loan-to-value (LTV) ratio is also important, so having a bigger down payment is better for your interest rate.

But banks will consider your circumstances differently. So you can give the same documentation to three different mortgage providers, and receive mortgage offers with vastly different rates and fees.

It’s impossible to know what direction mortgage rates will go from day to day. That’s why a mortgage rate lock is such a useful tool because it protects you if rates go up. And with interest rates being relatively low right now, you should lock in your rate as soon as you can.

When you lock in your rate, ask your lender how long the lock will last. A rate lock can be good for anywhere from 30 to 60 days, which typically will give you enough time to close before the lock expires. If something happens where you need to extend your rate lock, ask about fees as many lenders charge a fee for extending a rate lock.

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At NextAdvisor we’re firm believers in transparency and editorial independence. Editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by our partners. We do not cover every offer on the market. Editorial content from NextAdvisor is separate from TIME editorial content and is created by a different team of writers and editors.

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