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Mortgage guide: What to know before getting a mortgage
The information below consists of information and tips that will be helpful in selecting the best mortgage for your financial situation.
Bankrate expert weekly mortgage rate insight
Mortgage rates fell during the week ending July 21, a downtick that reminds homeowners there’s still time to refinance their home loans before rates start moving up in earnest. The average cost of a 30-year fixed-rate mortgage fell to 3.04 percent from last week's 3.11 percent, according to Bankrate's national survey of lenders. Rates reached a record low of 2.93 percent in January.
The 15-year fixed-rate mortgage fell to 2.38 percent from 2.43 percent the previous week. The 30-year fixed-rate loans in this week's survey included an average total of 0.33 discount and origination points.
You might be able to find an even better deal: The mortgage offers advertised on Bankrate.com were just 2.42 percent during the week ending July 17. This “clicked-on” rate reflects purchase mortgages and refinances with all terms, including 30- and 15-year loans. The rates may include discount points.
Current mortgage and refinance rates
Lenders nationwide provide weekday mortgage rates to our comprehensive national survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans. The interest rate table below is updated daily to give you the most current purchase rates when choosing a home loan. APRs and rates are based on no existing relationship or automatic payments. For these averages, the customer profile includes a 740 FICO score and a single family residence. To learn more, see understanding Bankrate rate averages.
|30-Year Fixed Rate||3.030%||3.260%|
|20-Year Fixed Rate||2.880%||3.090%|
|15-Year Fixed Rate||2.310%||2.620%|
|30-Year Fixed-Rate FHA||2.620%||3.510%|
|30-Year Fixed-Rate VA||2.680%||2.880%|
|30-Year Fixed-Rate Jumbo||3.050%||3.170%|
|15-Year Fixed-Rate Jumbo||2.300%||2.390%|
|7/1 ARM Jumbo||3.280%||3.590%|
|5/1 ARM Jumbo||2.850%||3.530%|
Rates as of Tuesday, July 27, 2021 at 6:30 AM
How mortgage rates work
Mortgage interest is basically how much you pay the bank to borrow its money. If you’re taking out a $100,000 mortgage, you’ll pay back more than $100,000 over time for the privilege. Generally speaking, shorter-term loans have lower interest rates than longer-term ones. With that lower interest rate and more-rapid payback, a 15-year mortgage, for example, will be a lot less expensive overall than a 30-year one. The flip side is, shorter-term loans mean higher monthly payments, so even though they save you money overall, they can squeeze your monthly budget unless you go for a cheaper home to offset the higher payment.
Why compare mortgage rates?
Shopping around for quotes from multiple lenders is one of Bankrate’s most important pieces of advice for every mortgage applicant. When you shop, it’s important to think about not just the interest rate you’re being quoted, but also all the other terms of the loan. Be sure to compare APRs, which include many additional costs of the mortgage not shown in the interest rate. Keep in mind that some institutions may have lower closing costs than others, or your current bank may extend you a special offer. There’s always some variability between lenders on both rates and terms, so make sure you understand the full picture of each offer, and think about what will suit your situation best.
July 2021 mortgage rate forecast
Rates have remained enticingly low throughout the first half of 2021 – lower than many experts predicted six months ago. And the outlook for July doesn’t call for a radical rate leap, either. Housing economists expect rates to rise only slightly -- if at all -- this month.
"Over the next month, rates may rise a bit but will likely be pretty close to where they are today – around 3 percent for the 30-year fixed-rate mortgage," says Leonard Kiefer, deputy chief economist for Freddie Mac.
Top 5 Bankrate Mortgage Lenders
- Better Mortgage Corporation: Best online lender
- Cardinal Financial Company: Best for low credit borrowers
- AmeriSave Mortgage Corporation: Best for refinancing
- Fairway Independent Mortgage Corporation: Best for first-time homebuyers
- Chicago Mortgage Solutions LLC: Best non-bank lender
Bankrate helps thousands of people find mortgage and refinance lenders every day. To determine the best mortgage lenders, we used proprietary data to see which mortgage lenders on our platform received the most leads within a three-month period. More than 150 lenders were included in the evaluation. We then used our editorial expertise and judgment to assign superlatives to each lender based on factors such as fees, products offered, convenience and other criteria. We update this list regularly.
Better Mortgage Company: Best online lender
Better.com is a 100 percent online lender that offers a range of low interest rate mortgage products for consumers across the United States. It holds the first spot on Bankrate’s June 2021 list of Best Mortgage Lenders.
Strengths: This digital lender can shave off time when it comes to your mortgage preapproval and closing process. Consumers experienced a three minute pre approval process and 21 day closing process on average. Better.com is available in 46 states along with Washington D.C.
If you’re a prospective borrower who receives a competitive rate elsewhere, you can take advantage of its Better Price Guarantee to match that rate quote. Alongside this guarantee, Better.com will give you $100 even if they can’t mirror that same offer.
For the home buyer who isn’t well-aquainted with digital mortgage lenders, Better.com does offer seven days a week support by phone as well as online if you have questions.
Weaknesses: There are limitations on the variety of mortgage products offered. If you’re looking for government insured loans such as those from the USDA or VA, you’ll have to search elsewhere.
It’s worth noting that you can only take advantage of the Better Price Guarantee, if you apply directly online at Better.com.
If you’re a borrower who isn’t tech-savy and rather would trust the in-person experience, this digital process may be an adjustment for you.
Read Bankrate's full Better Mortgage review
Cardinal Financial Company: Best for low credit borrowers
Cardinal Finance Company, also known as Sebonic Financial is a hybrid mortgage lender offering both an in person and online experience for potential borrowers.
It offers a wider range of mortgage products for the first-time homebuyer compared to its competitors.
Strengths: First time homebuyers have the opportunity to receive quotes on not just conventional loans but those insured by the FHA, USDA and VA as well. Both the FHA and USDA tend to have minimum credit score requirements of at least 580 while for VA insured loans that number inches lower to 550.
The lender also offers a speedy prequalification and preapproval process for those looking to save time. Cardinal Finance Company reports that some borrowers have been able to close their mortgage in as little as seven days.
The average time, the lender claims, hovers around 30 days.
Another strength is that homebuyers in all 50 states can access this lender.
Weaknesses: Not all the information regarding current mortgage rates and associated lender fees are listed on the website. You’ll need to seek out a representative via phone or physical branch.
Read Bankrate's full Cardinal Financial review
AmeriSave Mortgage Corporation: Best for refinancing
AmeriSave Mortgage Corporation is one of the nation’s largest mortgage lenders having licensed over 800 mortgage originators. It offers an array of mortgage products ranging from conventional and fixed mortgages to those insured by government agencies.
Strengths: The lender has a strong track record of lending mortgages with over $55 billion in loans funded year till date.
If you’re someone who is looking to save time in their loan process, AmeriSave’s timeline may fit with yours. The company has closed loans on an average of 25 days and offers prequalification along with custom mortgage rate quotes in as little as three minutes.
The company has greater transparency in regards to mortgage rates and fees compared to other lenders. Borrowers have the ability to view the full range of rates and products they can qualify for after they hand in a mortgage application.
The company also notes it does not charge loan origination fees for those looking to save some cash.
For the first-time homebuyer, AmeriSave also hosts a Knowledge Center, where you can familiarize yourself with mortgage jargon.
Weaknesses: You’ll still need to pay a flat $500 mortgage application fee, even if the origination fees are waived.
There also aren’t any unique perks for first time homebuyers besides the Knowledge Center.
Read Bankrate's full AmeriSave Mortgage Corporation review
Fairway Independent Mortgage Corporation: Best for first-time homebuyers
With more than 700 branches across the U.S., Fairway Independent Mortgage Corporation offers flexibility for both first-time and experienced homebuyers. It also offers a mobile app called FairwayNow where you can directly message your lender.
Strengths: If you’ve never taken out a mortgage before, you’re in luck. This lender offers an extensive glossary of mortgage terms you can read up on. You also can take advantage of loans that are insured by the FHA, VA and USDA. These have less strict credit score requirements and upfront down payments compared to conventional loans.
Weaknesses: You’ll have to talk to a representative to learn about lender fees as well as mortgage interest rates, as Fairway does not post these online.
If you live in Alaska or West Virginia you won’t be able to seek advantage of this lender as it’s available in all other 48 states. The same applies if you live in U.S. territories.
Read Bankrate's full Fairway Independent Mortgage Corporation review
Chicago Mortgage Solutions (Interfirst Mortgage Company): Best non-bank lender
Chicago Mortgage Solutions, also named Interfirst Mortgage Company acts as a retail lender, wholesaler and correspondent when it comes to mortgages.
Strengths: The company says in certain circumstances you can qualify for a mortgage in minutes.
Chicago Mortgage Solutions also received A+ rating from the Better Business Bureau, which is a good resource to determine a lender’s trustworthiness.
As a borrower, you have multiple options to apply for a mortgage. The company offers pathways through online, a broker or even a bank/credit union. This may come in handy if you aren’t tech-savvy or prefer talking in-person with a representative.
Weaknesses: It’s only licensed in 19 states so depending on where you live you may not have access to their products.
Another downside is if you’re trying to compare mortgage rates to other lenders, since Interfirst Mortgage doesn’t advertise daily rates on their website.
Read Bankrate's Interfirst Mortgage Company user reviews
Bankrate survey: Young Americans plan to continue delaying the homebuying process
Many Americans are postponing at least one major life event because of the coronavirus pandemic, according to a new Bankrate survey. 39 percent of respondents say they’ve delayed buying or leasing a car, buying a home, getting married, having a child or taking another significant step.
Some 12 percent of respondents to Bankrate’s survey say they delayed buying a house, relieving some of the pressure on a booming housing market characterized by a sharp shortage of inventory. More than half of homebuyers who delayed real estate purchases anticipate waiting nine months or longer. Younger buyers were more likely to say they’re waiting.
By age group, homebuying delays are expected by 18 percent of those ages 18 to 34, 15 percent of Americans 35 to 54 and just 5 percent of those 55 and older.
The supply of existing homes for sale is near record lows, in part because homeowners decided not to sell during the coronavirus pandemic. Meanwhile, homebuilders haven’t ramped up to historical levels. While there’s a shortage of homes for sale, there’s a glut of buyers vying for homes. That has resulted in bidding wars and soaring prices.
How to navigate your finances in uncertain times
The economic outlook has brightened considerably in recent months, but the U.S. economy remains on shaky footing. Here’s what you can do to prepare your finances for the next crisis:
- Make a plan. Get your financial life in shape. Determine how much you’ll spend, how much you’ll save and how you’ll tackle high-interest debt. If you plan to buy a home in the future, factor a down payment into your savings plan. Now can be a good time to shore up those funds while you wait for housing inventory to open up or decide where you want to live. Having a bigger down payment can help you get more favorable loan terms and afford more house for your money.
- Build a rainy-day fund. You’ll sleep better once you’ve amassed an emergency fund equal to about six months’ worth of your expenses. Stash the cash in a liquid and accessible vehicle, such as a high-yield savings account. Shop around for the best rate, and for an account that fits your needs.
- Consider refinancing debt. Mortgage rates have risen slightly from record lows, but millions of homeowners still could shave hundreds of dollars from monthly payments by refinancing. If you’re carrying high-cost credit card debt, check if a balance transfer card is right for you.
Do you already own a home and want to refinance?
Refinancing your mortgage can be a good financial move if you lock in a lower rate. However, there are upfront costs associated with refinancing, such as appraisals, underwriting fees and taxes, so you’ll want to be sure the savings outpace the refinance price tag in a reasonable amount of time, say 18 to 24 months.
While mortgage rates have risen from the record lows of late 2020 and early 2021, they remain at historically low levels. That means millions of homeowners still could save by refinancing. Reducing your rate isn’t the only reason to refinance. It’s also possible to tap into your home equity to pay for home renovations. Or, if you want to pay down your mortgage more quickly, you can shorten your term to 20, 15 or even 10 years. And because home values have risen sharply, it’s possible that a refinance could free you from paying for private mortgage insurance.
For more information, visit Bankrate’s mortgage refinancing hub. Learn more about refinance rates.
Mortgage rates in other states
- United States
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- Washington DC
- West Virginia