Mortgage rates are among the most important variables you need to be aware of when you’re planning to buy a home. Your mortgage interest rate determines your monthly payment and, by extension, the total amount you’ll end up paying for your home. Even a slight change in your interest rate can translate into a significant change in your monthly payment and a big difference in the total amount you pay back. Mortgage rates fluctuate according to many different factors. Mortgage rates are partly determined by you, the potential buyer. Your credit history, employment history, debt-to-income ratio, cash reserves, and so forth. All of these things are factors which you can change to one degree or another.
Aside from these things, mortgage rates are also impacted by a host of external factors. External factors include things like stock indices, oil prices, gold prices, yields on Treasury bills, and others.
Unfortunately for buyers, average mortgage rates for the early part of September (as of the 10th) increased slightly from where the average was one week ago. There were only two types of loans which didn’t show an increase in average interest rate; these were conventional 30 year fixed-rate loans and 15-year fixed VA loans. Let’s look at the current data for mortgage interest rates as of the 10th of September.
Mortgage Rates as of September 10, 2019
The rates for conventional 30-year fixed loans, 15-year fixed, 5-year ARMs, 30-year fixed FHA, 15-year fixed FHA, 5-year FHA ARMs, 30-year fixed VA, 15-year fixed VA, and 5-year VA ARMs are as follows: 3.995, 3.75, 4.5, 3.313, 3.375, 3.5, 3.313, 3.313 and 3.5, respectively.
Again, all of these new rates represent increases over the previous week except for the 30-year conventional loans and 15-year fixed VA loans.
Takeaways for Potential Buyers
Whenever we see interest rates rise, as they have here, this isn’t good news for buyers. But because rates fluctuate according to so many different variables, this doesn’t’ necessarily spell bad news for home buying over the short-term future. Although most of the major external indicators point to continued rises, nothing is guaranteed. And stock indices have been favorable from a mortgage rate standpoint, and so that could balance things out. Even though mortgage rates are undoubtedly very important, remember that this is just one factor among many in the home buying process. If you put off buying a home for another 6 months, this could mean you’ll face higher rates when you ultimately enter the market; but it could also mean you’re more prepared to handle the other associated costs of homeownership. Everything has to be put properly in perspective, and so each individual case has to be examined independently to see whether a given rate is acceptable or unacceptable.
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