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Yahoo
4 days ago
- Business
- Yahoo
VA loans in focus: How veterans can make homeownership work
Many veterans may not realize how flexible and valuable US Department of Veteran Affairs (VA) home loans can be. Black Dog Wealth certified financial planner Vanessa Alanis joins Mind Your Money with Allie Canal to explain how to qualify for VA loans, avoid missteps, and use the benefit to build long-term wealth. To watch more expert insights and analysis on the latest market action, check out more Mind Your Money. Lenders issued more than 416,000 VA backed loans in fiscal year 2024 with the average loan amount coming in at just over $373,000. That's according to the VA. Here to talk about how veterans can secure the best VA loan is Vanessa Alanis, a certified financial planner at Black Dog Wealth. Vanessa and her spouse recently went through the VA loan process themselves. So Vanessa, let's start there. What was that experience like and what surprised you most along the way? Thank you so much for having me. Um, it was uh, actually very smooth. I have to say, the process was handled well by we had a lender that was familiar with the VA home loan process. So pretty nice, um, and owning our own home after so many years of service was a definite treat. So for veterans or service members just starting out, what's that very first step they need to take when applying for a VA loan? The very first step, a veteran, um, and again, you don't have to be a veteran, you can still be an active duty service member to use this benefit. But the very first thing that want to do is get a certificate of eligibility from the VA. They can get this certificate either by going online or by having their potential mortgage lender apply for it that way or since it's the government, we can still do it by the mail as well. But that would be the first step to make sure that they are eligible and to get that certificate of eligibility. So you mentioned that certificate of eligibility. How does someone get that and what else will lenders still want to see in terms of credit and finances? Again, the certificate of eligibility comes from the VA. So they will use that, the VA to get the certificate from. Applying for VA home loan is the same as applying for a regular home loan. So all of the other things will still matter. Um, a veteran would want to make sure that their credit is in order, have their personal finances in order. Um, they're going to want to make sure they understand how much they can afford and look at their numbers before starting the loan approval process because they want to make sure that uh, the mortgage, the mortgage loan provider is not going to make sure that they're providing a loan that the person cannot pay for. Uh, they're going to want to make sure they can do that themselves. Um, I see here that, yeah, to qualify for a VA loan, again, it doesn't have to be a veteran, can be an active duty service member and in certain situations, uh, qualifying surviving spouses. And what a great thing about VA funds is that there's usually no down payment, but that doesn't mean that there are no fees. So a VA funding fee is something unique to veterans. How does it work and how should vets navigate this? So you're correct, there is no down payment for a VA home loan, but the VA does try to recoup the expenses of running this program to taxpayers by having a funding fee. And a funding fee is a percentage of the mortgage and this percentage ranges depending on whether or not it's the first or subsequent use of this benefit and if there is a down payment involved. And again, a down payment is not required, but a service member can come to the table with one. The fee ranges anywhere from zero to about three and a half percent of the loan value and it can be financed. But this is definitely something for a service member to have, uh, be planning for as they're preparing to purchase a home. And is a VA loan a one-time benefit? Are there other restrictions on property types for this type of loan? No, the benefit can be used more than once. Um, so a property restriction is that it has to be for a primary residence. So a service member has to be planning on living in this house initially. But, um, per your previous guests, if they should move and decide to rent it out, they can still use some remaining benefit to purchase another home. Um, they would want to get their a new certificate of eligibility before engaging in the home loan process for a second home to make sure that they know how much benefit is available for them. But yes, they can use it more than once. Um, so it really can help people, um, increase their wealth. And any lender can choose to work with the VA. So how should veteran shop around for the best rates, the best terms, and is this search any different from someone who isn't a veteran? It's not too different except you do want to make sure that your lender is familiar with the VA home loan process. Um, because there are a couple extra documents that are, um, and processes that are involved such as having a VA home appraiser and the, uh, escape clause so to speak, um, if your home should not appraise for the correct value. But other than that, you're going to want to shop around the same way, who offers the best interest rates, who has the best customer service? Um, those kinds of things and an interesting fact that just because a bank may be, um, very familiar within the military community, does not necessarily mean they are providing the best rates or customer service. So I do encourage people to shop around to at least three different vendors if they are looking at getting a home loan. And I'm curious, are there specific VA lenders? Um, there are mortgage providers who tout themselves as being VA lenders, but that just means that they choose to uh, accept VA backed loans. The VA does not, um, sponsor individual lenders. Okay. And how can veterans think strategically about using a VA loan, whether that's refinancing later, buying again after a move or building some of that long-term wealth that you were just referencing through home ownership? Well, I think it's important that veterans, um, look at their whole financial picture when trying to utilize a product like this and understand how this fits into their total goals, um, preferably using a financial professional to help them along with this. But it can help them secure housing, um, at their different duty stations and it again, it can be used to build, um, investment property, an investment property portfolio if done in the right way. So I just encourage them to look at their total financial picture and what their family's goals are. And Vanessa, thank you so much for your insights. And you can scan the QR code below to get more information about VA loans. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-07-2025
- Business
- Yahoo
Selling your home at a loss? Everything you need to know before you list.
During the pandemic-era housing boom, bidding wars and over-asking-price offers became the norm. However, some buyers may face a tough reality today: They need to sell — but at a loss. Whether you're facing a job change, financial hardship, or another one of life's twists and turns, taking a hit when selling your home is never ideal. However, it's not the end of the world, and you may have options that put you ahead financially. Read more: The best mortgage lenders for bad credit scores In this article: Reasons for selling a house at a loss How to know if you're actually taking a loss Options if you're facing a loss When it might make sense to sell at a loss Tax implications to note FAQs Reasons for selling a house at a loss Not every home sale ends in profit, especially if you haven't owned your home for very long. Even in a strong housing market — like the one we're in today — it's possible to walk away with less than you put in for several reasons. You lack equity If you bought your home with a low down payment using mortgages like VA loans or FHA loans, you didn't have much equity in your house to begin with. And in the early years of homeownership, most of your early mortgage payments go toward interest rather than paying down the principal. Selling in the first few years means you likely won't have built up much equity, and selling costs can easily wipe out what little you have. Your local housing market has cooled off Home values don't rise evenly throughout the country. If prices in your area have stalled or dipped while prices in other regions have continued to rise, your home might sell for less than you paid — especially if inventory has increased, buyer demand has slowed, or there's some other reason for depreciation. Life changes force a move Sometimes the decision to sell isn't about money; it's about necessity. A new job, growing family, unexpected expense, or divorce with a co-owner of the house can create pressure to sell before you're financially ready. Selling costs add up Between commissions, closing costs, and other expenses, selling a house often costs 6% to 10% of the sale price. Those fees alone can quickly turn a small gain into a net loss. How to know if you're actually taking a loss It's easy to assume you're losing money on your home if it sells for less than you paid. However, that's not the whole story. To really know where you stand, you'll need to do a little math and factor in a variety of costs. Your purchase price: This includes what you paid for the home, plus the cost of any upgrades or improvements you made while living there. Your current mortgage balance: Your remaining loan balance may be more than you expect, especially if you haven't owned the home very long. Estimated selling price: This is what a buyer is willing to pay in your current market, not necessarily what you'd like to get. Agent commissions: A typical real estate commission for sellers is 6%, as sellers have historically covered both the seller's and buyer's shares (or 3% each). Now, sellers aren't necessarily required to pay buyers' agent fees, so depending on your situation, you could find yourself paying roughly 3% to 6%. Closing costs: These can include, but aren't limited to, the title search, escrow fees, and real estate attorney fees. Repairs and prep work: From painting and cleaning to various other home improvements you pay for before listing the home, don't forget to include these costs in your total expenses. Dig deeper: How much does it cost to sell your house? A real-world example Let's say you bought a home in 2021 for $460,000 and put 5% down ($23,000). From the get-go, your mortgage loan balance is $437,000, and you start making monthly payments toward the principal and interest. Now, you're the new caregiver for your aging parents and need a bigger home. Your real estate agent says the best asking price you can get on your current house is $445,000, and you still owe $420,000 on your mortgage. You pay a 3% agent commission (~$13,350), $6,500 in closing costs, and another $2,000 to get the house ready for sale. Here's how it all breaks down: So, even though you sold your home for $15,000 less than you paid, your final loss on the transaction is $3,150 — not counting your original down payment and the mortgage payments you made along the way, which helped you gain equity in the home along the way. Up Next Up Next Options if you're facing a loss If the math shows you're selling your house at a loss, you still have choices. Some may help you avoid selling altogether, while others can help you strategically cut your losses. Stay put and ride it out If you're not in a rush to move, holding onto your home for a few more years could help you build equity and recover value. You could also save significantly if you locked in a lower mortgage rate when you bought the house than those available today, making your current payment more affordable than one you might get on a new home. Rent it out Becoming a landlord isn't for everyone, but depending on your local real estate market, it could be a highly profitable move. 'Some would-be sellers simply can't believe what their units would rent for when I tell them,' said Mark Zipperer, owner and broker with The Zipp Group in Chicago, in a phone interview. Rental income could more than cover your current mortgage and still let you make the housing move you want, especially if you live in a major metropolitan area where competition for rentals is fierce. 'Here in Chicago, we're doing open houses for rentals and getting upwards of 20 applications per unit,' said Zipperer. 'Prospective renters are even bidding up the rental price in hopes of being selected for the unit.' While Chicago's market might not reflect yours, there's no harm in checking into what your unit would rent for. If you decide to go the landlord route, Zipperer also advised getting up to speed on local rental ordinances so you're legally protected. You can also work with a property management company if you'd prefer someone else to handle the day-to-day details and legalese on the rental side. Consider a short sale If you owe more than your home is worth, you may be able to negotiate a short sale with your mortgage lender. With a short sale, your home sells for less than the mortgage balance, and the lender agrees to forgive the difference. Short sales typically require that you be behind on your mortgage payments and require lender approval. This move can also impact your credit — a consideration if you're looking to short sell and then buy another home. Bring cash to closing If you're close to breaking even, you could bring money to the closing table to cover the gap. It's not ideal, but it might prove a good strategy if selling will free you up to make a better financial decision elsewhere, such as relocating for a better job. When it might make sense to sell at a loss In some cases, taking a loss isn't a sign of financial defeat — it's a strategic move. Here are times to consider selling your house at a loss. You're struggling with monthly expenses. Selling a home you can't comfortably afford may hurt now, but it could help you get back on firm financial footing sooner. You're relocating for a better opportunity. A higher-paying job, lower living costs, or being closer to family may all justify the short-term loss. You're facing changing household needs. A growing family, aging parents, or accessibility needs might mean your current home no longer fits. It brings you peace of mind. Shedding an asset that feels like a burden could lighten your financial burden and spirits. Dig deeper: Do you have home buyer's remorse? Here's what to do next. Tax implications to note If you're thinking, 'Oh, I'll just write the loss from selling my home off on my taxes,' think again. In most cases, the IRS doesn't allow you to deduct a capital loss on the sale of your primary residence on your federal taxes. However, if the home you want to sell was used as a business or rental property rather than a personal residence, it's treated differently by the IRS. Losses in those cases may be deductible depending on your tax situation. To be safe, consult a licensed tax professional. Read more: Capital gains tax — How much you'll pay when you sell a home Selling a house at a loss FAQs What happens if you sell a home for a loss? If you sell a home for less than your remaining mortgage balance and sale costs, you'll need to cover the difference out of pocket. This is considered a financial loss, but it won't impact your taxes unless the home was a rental or investment property. If you're behind on payments, a mortgage lender may agree to a short sale; however, this can negatively impact your credit. Can I write off a loss on my house? Generally, no. The IRS does not allow you to deduct a loss from the sale of your primary residence because it's considered personal-use property. However, if the home was used as a rental or business property, a loss may be deductible under certain conditions. Always consult a tax professional to understand how the rules apply to your situation. Should I sell my house at a loss or rent it out? Renting your home could help you avoid selling it at a loss, especially if it covers your mortgage and other costs. However, being a landlord comes with its own responsibilities and risks. Be sure to speak with a real estate professional well-versed in rentals in your area before jumping into the rental market with your property. Note: The author has bought and sold property through Mark Zipperer. Laura Grace Tarpley edited this article.
Yahoo
07-07-2025
- Business
- Yahoo
Mortgage and refinance interest rates today for July 7, 2025: How to handle a high-rate housing market
Today's mortgage interest rates have increased a little bit. According to Zillow data, the current 30-year fixed mortgage rate has ticked up by one basis point to 6.59%, and the 15-year fixed rate has risen by four basis points to 5.81%. So, how can you get the lowest mortgage rate possible in a high-rate environment? Shop around for mortgage lenders and loan programs. For example, find a lender that offers VA loans (if you qualify), which typically charge lower rates than conventional loans. Or search for a company with an interest rate buydown program. By choosing the right lender and loan, you can buy a house and start building equity. Dig deeper: How to buy down your mortgage interest rate Here are the current mortgage rates, according to the latest Zillow data: 30-year fixed: 6.59% 20-year fixed: 6.24% 15-year fixed: 5.81% 5/1 ARM: 7.36% 7/1 ARM: 7.38% 30-year VA: 6.14% 15-year VA: 5.60% 5/1 VA: 6.29% Remember, these are the national averages and rounded to the nearest hundredth. These are today's mortgage refinance rates, according to the latest Zillow data: 30-year fixed: 6.59% 20-year fixed: 6.24% 15-year fixed: 5.81% 5/1 ARM: 7.36% 7/1 ARM: 7.38% 30-year VA: 6.14% 15-year VA: 5.60% 5/1 VA: 6.29% Again, the numbers provided are national averages rounded to the nearest hundredth. Although it's not always the case, mortgage refinance rates tend to be a little higher than purchase rates. Read more: The best mortgage refinance lenders right now You can use the free Yahoo Finance mortgage calculator to play around with how different terms and rates will affect your monthly payment. Our calculator considers factors like property taxes and homeowners insurance when estimating your monthly mortgage payment. This gives you a better idea of your total monthly payment than if you just looked at mortgage principal and interest. But if you want a quick, simple way to see how today's rates would impact your monthly mortgage payment, try out the calculator below: Today's average 30-year mortgage rate is 6.59%. A 30-year term is the most popular type of mortgage because by spreading out your payments over 360 months, your monthly payment is relatively low. If you had a $300,000 mortgage with a 30-year term and a 6.59% rate, your monthly payment toward the principal and interest would be about $1,914, and you'd pay $389,038 in interest over the life of your loan — on top of that original $300,000. The average 15-year mortgage rate is 5.81% today. Several factors must be considered when deciding between a 15-year and 30-year mortgage. A 15-year mortgage comes with a lower interest rate than a 30-year term. This is great in the long run because you'll pay off your loan 15 years sooner, and that's 15 fewer years for interest to compound. However, your monthly payments will be higher because you're squeezing the same debt payoff into half the time. If you get that same $300,000 mortgage but with a 15-year term and a 5.81% rate, your monthly payment would jump up to $2,501— but you'd only pay $150,158 in interest over the years. Dig deeper: How much house can I afford? Use our home affordability calculator. With an adjustable-rate mortgage, your rate is locked in for a set period of time and then increases or decreases periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years, then changes every year. Adjustable rates usually start lower than fixed rates, but you run the risk that your rate goes up once the introductory rate-lock period is over. But an ARM could be a good fit if you plan to sell the home before your rate-lock period ends — that way, you pay a lower rate without worrying about it rising later. Lately, ARM rates have occasionally been similar to or higher than fixed rates. Before dedicating yourself to a fixed or adjustable mortgage rate, be sure to shop around for the best lenders and rates. Some will offer more competitive adjustable rates than others. Mortgage lenders typically give the lowest mortgage rates to people with higher down payments, excellent credit scores, and low debt-to-income ratios. So if you want a lower rate, try saving more, improving your credit score, or paying down some debt before you start shopping for homes. You can also buy down your interest rate permanently by paying for discount points at closing. A temporary interest rate buydown (as mentioned early in the article) is also an option — for example, maybe you get a 6.5% rate with a 2-1 buydown. Your rate would start at 4.5% for year one, increase to 5.5% for year two, then settle in at 6.5% for the remainder of your term. Just consider whether these buydowns are worth the extra money at closing. Ask yourself if you'll stay in the home long enough that the amount you save with a lower rate offsets the cost of buying down your rate before making your decision. Here are interest rates for some of the most popular mortgage terms: According to Zillow data, the national average 30-year fixed rate is 6.59%, the 15-year fixed rate is 5.81%, and the 5/1 ARM rate is 7.36%. A normal mortgage rate on a 30-year fixed loan is 6.59%. However, keep in mind that's the national average based on Zillow data. The average might be higher or lower depending on where you live in the U.S. Mortgage rates probably won't drop significantly in 2025 — especially over the next several weeks while economists keep an eye on inflation, national politics, and unrest in the Middle East.
Yahoo
05-07-2025
- Business
- Yahoo
Mortgage and refinance interest rates today, July 5, 2025: Rates hold steady
Today's mortgage rates have inched up, but the increases are pretty small. For example, according to Zillow, the average 30-year fixed mortgage rate is up one basis point to 6.59%. The average 15-year fixed rate has risen by four basis points to 5.81%. Steady mortgage interest rates can be good for buyers who want to lock in a rate. Sure, borrowers would be happy if rates dropped drastically — but stable rates are more reliable than volatile ones, which the U.S. housing market has had plenty of experience with so far in 2025. Read more: What determines mortgage rates? It's complicated. Here are the current mortgage rates, according to the latest Zillow data: 30-year fixed: 6.59% 20-year fixed: 6.24% 15-year fixed: 5.81% 5/1 ARM: 7.36% 7/1 ARM: 7.38% 30-year VA: 6.14% 15-year VA: 5.60% 5/1 VA: 6.29% Remember, these are the national averages and rounded to the nearest hundredth. Learn more: 8 strategies for getting the lowest mortgage rates These are today's mortgage refinance rates, according to the latest Zillow data: 30-year fixed: 6.59% 20-year fixed: 6.24% 15-year fixed: 5.81% 5/1 ARM: 7.36% 7/1 ARM: 7.38% 30-year VA: 6.14% 15-year VA: 5.60% 5/1 VA: 6.29% Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that's not always the case. Use the mortgage calculator below to see how today's interest rates would affect your monthly mortgage payments. For a deeper dive, you can use Yahoo's free mortgage calculator to see how homeowners insurance and property taxes factor into in your monthly payment estimate. You even have the option to enter costs for private mortgage insurance (PMI) and homeowners' association dues if those apply to you. These details result in a more accurate monthly payment estimate than if you simply calculated your mortgage principal and interest. There are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable. A 30-year fixed-rate mortgage has relatively low monthly payments because you're spreading your repayment out over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike with an adjustable-rate mortgage (ARM), your rate isn't going to change from year to year. Most years, the only things that might affect your monthly payment are any changes to your homeowners insurance or property taxes. The main disadvantage to 30-year fixed mortgage rates is mortgage interest — both in the short and long term. A 30-year fixed term comes with a higher rate than a shorter fixed term, and it's higher than the intro rate to a 30-year ARM. The higher your rate, the higher your monthly payment. You'll also pay much more in interest over the life of your loan due to both the higher rate and the longer term. The pros and cons of 15-year fixed mortgage rates are basically swapped from the 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you'll pay off your mortgage 15 years sooner. So you'll save potentially hundreds of thousands of dollars in interest over the course of your loan. However, because you're paying off the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term. Dig deeper: 15-year vs. 30-year mortgages Adjustable-rate mortgages lock in your rate for a predetermined amount of time, then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once per year for the remaining 25 years. The main advantage is that the introductory rate is usually lower than what you'll get with a 30-year fixed rate, so your monthly payments will be lower. (Current average rates don't necessarily reflect this, though — in some cases, fixed rates are actually lower. Talk to your lender before deciding between a fixed or adjustable rate.) With an ARM, you have no idea what mortgage rates will be like once the intro-rate period ends, so you risk your rate increasing later. This could ultimately end up costing more, and your monthly payments are unpredictable from year to year. But if you plan to move before the intro-rate period is over, you could reap the benefits of a low rate without risking a rate increase down the road. Learn more: Adjustable-rate vs. fixed-rate mortgage First of all, now is a relatively good time to buy a house compared to a couple of years ago. Home prices aren't spiking like they were during the height of the COVID-19 pandemic. So, if you want or need to buy a house soon, you should feel pretty good about the current housing market. However, mortgage rates are staying relatively high due to the political and economic climate. Experts don't think rates will plummet in 2025, so you might not want to base your decision on whether to buy strictly on interest rates. Recent news that home price gains are slowing, with predictions that house values may actually ease lower this year, can be part of your home buying decision. The best time to buy is typically whenever it makes sense for your stage of life. Trying to time the real estate market can be as futile as timing the stock market — buy when it's the right time for you. Read more: Which is more important, your home price or mortgage rate? According to Zillow, the national average 30-year mortgage rate is 6.59% right now. But keep in mind that averages can vary depending on where you live. For example, if you're buying in a city with a high cost of living, rates could be higher. Overall, mortgage rates are expected to lower slightly in 2025. Rates may inch up or down from day to day, but there shouldn't be a huge shift in the near future. No, mortgage rates have been fairly steady over the last week, even ticking up today. In many ways, securing a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and lower your debt-to-income ratio (DTI). Refinancing into a shorter term will also land you a lower rate, though your monthly mortgage payments will be higher.
Yahoo
02-07-2025
- Business
- Yahoo
Mortgage and refinance interest rates today, July 2, 2025: Mostly unchanged as U.S. budget bill nears finish line
Mortgage interest rates are mostly unchanged today. According to Zillow, the average 30-year fixed rate eased lower two basis points to 6.53%. The 15-year mortgage held steady at 5.69%. On Tuesday, the 10-year Treasury, a benchmark for mortgage rates, fell as prospects for a Federal Reserve rate cut further dimmed. As traders sold, yields rose a half point. That's not a major move, but if the trend continues, it may not be good news for mortgage rates. If the House seals the deal on the budget bill today, markets may react positively. Read more: Housing costs are still the stickiest part of an otherwise cool inflation report Here are the current mortgage rates, according to the latest Zillow data: 30-year fixed: 6.53% 20-year fixed: 6.07% 15-year fixed: 5.69% 5/1 ARM: 7.18% 7/1 ARM: 7.03% 30-year VA: 6.05% 15-year VA: 5.39% 5/1 VA: 6.19% Remember, these are the national averages and rounded to the nearest hundredth. Learn more: Here's how mortgage rates are determined These are today's mortgage refinance rates, according to the latest Zillow data: 30-year fixed: 6.62% 20-year fixed: 6.12% 15-year fixed: 5.70% 5/1 ARM: 7.39% 7/1 ARM: 7.22% 30-year VA: 6.14% 15-year VA: 5.69% 5/1 VA: 6.09% Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that's not always the case. Use the mortgage calculator below to see how various interest rates and loan amounts will affect your monthly payments. It also shows how the term length plays into things. To dive deeper, use the Yahoo Finance mortgage calculator, which includes homeowners insurance and property taxes in your monthly payment estimate. You even have the option to enter costs for private mortgage insurance (PMI) and homeowners' association dues if those apply to you. These details result in a more accurate monthly payment estimate than if you simply calculated your mortgage principal and interest. There are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable. A 30-year fixed-rate mortgage has relatively low monthly payments because you're spreading your repayment out over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike with an adjustable-rate mortgage (ARM), your rate isn't going to change from year to year. Most years, the only things that might affect your monthly payment are any changes to your homeowners insurance or property taxes. The main disadvantage to 30-year fixed mortgage rates is mortgage interest — both in the short and long term. A 30-year fixed term comes with a higher rate than a shorter fixed term, and it's higher than the intro rate to a 30-year ARM. The higher your rate, the higher your monthly payment. You'll also pay much more in interest over the life of your loan due to both the higher rate and the longer term. The pros and cons of 15-year fixed mortgage rates are basically swapped from the 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you'll pay off your mortgage 15 years sooner. So you'll save potentially hundreds of thousands of dollars in interest over the course of your loan. However, because you're paying off the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term. Dig deeper: 15-year vs. 30-year mortgages Adjustable-rate mortgages lock in your rate for a predetermined amount of time, then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once per year for the remaining 25 years. The main advantage is that the introductory rate is usually lower than what you'll get with a 30-year fixed rate, so your monthly payments will be lower. (Current average rates don't reflect this, though — fixed rates are actually lower. Talk to your lender before deciding between a fixed or adjustable rate.) With an ARM, you have no idea what mortgage rates will be like once the intro-rate period ends, so you risk your rate increasing later. This could ultimately end up costing more, and your monthly payments are unpredictable from year to year. But if you plan to move before the intro-rate period is over, you could reap the benefits of a low rate without risking a rate increase down the road. Learn more: Adjustable-rate vs. fixed-rate mortgage The national average 30-year mortgage rate is 6.53% right now, according to Zillow. But keep in mind that averages can vary depending on where you live. For example, if you're buying in a city with a high cost of living, rates could be even higher. Mortgage rates will likely remain in a tight range over the next few months. There are many questions regarding the economy, inflation, and the job market. Don't look for big moves in interest rates unless bad economic news develops. Not significantly. Mortgage rates continue to be about where they were one year ago. In many ways, securing a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and lower your debt-to-income ratio (DTI). Refinancing into a shorter term will also land you a lower rate, though your monthly mortgage payments will be higher.
