Today’s Mortgage, Refinance Rates: Oct. 25, 2022

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Lending rates have increased in recent days. So far this year, the average 30-year mortgage rate has risen more than three percent, according to Freddie Mac, although the rate of growth has slowed in recent weeks. a few.

With 30-year fixed rates now above 7% for many borrowers, those looking to save money on their mortgage may want to consider expanding the type of loan they are considering. .

Adjustable rate loans are a great way to save, as they often have lower interest rates than fixed rate loans. But ARMs can be risky, because your money can increase after your introductory period ends. For longer monthly payments, borrowers may consider a shorter term, such as a 15-year fixed-rate loan, or a government-backed fixed-rate loan, such as a mortgage FHA or VA. Government-backed loans offer higher interest rates than their traditional counterparts, making them a viable option – especially for those with lower credit scores.

Mortgage rates are likely to continue to rise throughout the remainder of 2022 and the first few months of 2023, and may increase further. Home buyers who are looking for financing should shop around with multiple lenders and explore all of the loan options available to them to find the best deal.

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Although buyers are going through a tough environment right now, the downside is that the drop in demand for homes means that those who remain on the market have more room for sellers to downsize. price and other transactions.

Current loan rates

Types of loans Today’s average
This information is provided by Zillow. See more mortgage rates on Zillow

Current funding rate

Types of loans Today’s average
This information is provided by Zillow. See more mortgage rates on Zillow

Loan calculator

Use our free mortgage calculator to see how your current mortgage rate affects your monthly and long-term payments.

Loan calculator

Estimate your monthly income

  • Payment a 25% higher payments will save you $8,916.08 with interest
  • The lowering of interest rates by 1% to save you $51,562.03
  • Pay extra $500 each month will reduce the length of the loan 146 MOON

By connecting the length of the term and the interest rate, you can see how your monthly payment could change.

Estimated interest rates for the year 2023

Mortgage rates began to rise from historic lows in the second half of 2021 and have increased significantly so far in 2022. They are likely to remain near current levels. for the rest of 2022.

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But many forecasters expect rates to start falling next year. In their latest forecast, Fannie Mae researchers predicted that the current interest rate and the 30-year fixed rate will drop to 6.2% by the end of 2023.

The Mortgage Bankers Association also noted that a recession in the first half of 2023 could result in an even faster decline. It is currently estimated that there is a 50% chance of this happening in the coming years.

Whether interest rates will fall in 2023 depends on whether the Federal Reserve can control inflation.

In the last 12 months, consumer prices rose 8.2%. That’s only a small drop from the previous month’s numbers, which means the Fed may need to keep raising the federal funds rate to keep prices down.

As the cost of living decreases, mortgage rates may also begin to decrease. If the Fed moves too aggressively and prepares for a recession, mortgage rates could fall further than currently expected. But rates may not drop to the historic lows enjoyed by borrowers over the past two years.

When will house prices go down?

Home prices are starting to fall, but we likely won’t see much of a decline, even if there is a recession.

The S&P Case-Shiller Home Price Index shows that prices are still rising year-over-year, although they fell month-over-month in July. Fannie Mae researchers expect prices to fall 1.5% in 2023, while MBA expects a 2.8% increase in 2023 and a 2.1% rise in 2024.

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High mortgage rates have pushed prospective buyers out of the market, slowing home-buying demand and putting downward pressure on home prices. But rates may begin to decline next year, which will take some of that pressure off. The current housing supply is also historically low, which may prevent prices from falling too far.

What happens to home prices in a recession?

Home prices often fall during recessions, but not always. When this happens, it’s generally because fewer people can afford to buy a home, and low demand forces sellers to lower prices.

How much debt can I pay off?

A loan calculator can help you determine how much you can borrow. Play around with different home prices and down payment amounts to see how much you can pay each month, and think about how it fits into your overall budget.

In general, experts recommend spending no more than 28% of your monthly income on housing costs. This means that your monthly payments, including taxes and insurance, should not exceed 28% of your monthly income before taxes.

The lower your interest rate, the more you can borrow, so shop around and get pre-approved with multiple lenders to see who can give you the best rate. However, be sure to borrow more than your budget allows.


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