How to Lock in a Low Mortgage Rate
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What is the main topic discussed in this episode?
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Here's your money briefing for Wednesday, March 9th. I'm J.R.
How are mortgage rates changing and why does timing matter for buyers?
Whelan for The Wall Street Journal. After years of record or near-record lows, economists expect mortgage rates to climb in the next several weeks. For some consumers, locking in mortgage rates before they rise could mean the difference between affording a new home and not. But acting fast is not the only trick to getting a lower rate.
So as tempting as it may be to start thinking about furnishing your house and buying nice new fixtures and such, hold off. Wait on those big purchases until the mortgage closes.
Coming up, we'll talk with WSJ personal finance reporter Veronica Dagger about what consumers can do to keep their credit rate high and how to avoid pitfalls in the mortgage process. That's after the break.
What factors caused recent mortgage rates to dip near 4%?
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Mortgage rates have been at historic lows for the past few years, but since the beginning of the year, they've been slowly creeping up, nearing 4%. And economists expect that number to rise more in the coming weeks and months. So what should you do if you want to lock in those low rates now? Let's bring in WSJ reporter Veronica Dagger for some tips. Hey, Veronica, thanks so much for being with us.
Thanks for having me.
So, Veronica, mortgage rates were off to the races for the first two months of the year. Why did they tick lower?
The conflict in Ukraine is one reason rates are staying low for the moment. That's what economists and analysts are saying.
How could Federal Reserve moves and economic events push mortgage rates higher?
You know, investors tend to gravitate toward what they see as safe investments during times of geopolitical tensions and upheaval. And that means things like U.S. Treasury bonds and mortgage-backed securities. And Since mortgage rates are so closely tied to the 10-year Treasury note, which also fell recently, that is adding pressure onto mortgage rates, which is a good thing for people who are looking to get a mortgage.
So, you know, we saw mortgage rates approach 4% in the past few weeks after falling to record lows during the depths of the pandemic. What could cause the rates to rise again?
Well, the Fed is meeting next week and likely going to raise interest rates. And so when that happens, we're likely going to see mortgage rates go up as well. How much they're going to go up, it may just be incremental, but still it will tack on more dollars to people's mortgages if you're out there shopping for one. There's a flip side to this, right? You know, you're going to be having to pay a more expensive mortgage most likely, especially if you don't have that top credit score. But on the flip side, often it adds a little pressure in the housing market in that more houses become available because less people may be shopping for a mortgage because the mortgages are more expensive. I mean, that's traditionally what happened.
We're in this very strange housing market. And so that may not happen. That rule may not apply this spring selling season. But it could increase some inventory for potential buyers, which would be a good thing.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:39
2
How are mortgage rates changing and why does timing matter for buyers?
0:39–1:20
3
What factors caused recent mortgage rates to dip near 4%?
1:20–2:32
4
How could Federal Reserve moves and economic events push mortgage rates higher?
2:32–4:08
5
How does your credit score impact the mortgage rate you'll be offered?
4:08–4:52
6
What should you avoid doing while awaiting mortgage approval to protect your credit?
4:52–5:43
7
Are discount points worth buying and what are their pros and cons?
5:43–6:32
8
How can you compare lender fees and APR to find the best overall mortgage deal?
6:32–11:27
Speakers
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