Mortgage Interest Rates on the Rise
Critical market update! Over the past week, mortgage interest rates rose drastically.
Most of us in the industry anticipated this was coming in February or March, but rates are already skyrocketing just a couple weeks into 2022. This change will significantly affect buyers’ mortgage payments, so we wanted to give you the rundown on what’s happening ASAP.
Here are the numbers NerdWallet via Zillow is reporting:
| Loan Term | Rate | APR |
| 30-year fixed-rate | 3.376% | 3.455% |
| 20-year fixed-rate | 3.221% | 3.333% |
| 15-year fixed rate | 2.445% | 2.589% |
| 10-year fixed rate | 2.432% | 2.564% |
| 7/1 ARM | 2.646% | 2.978% |
| 5/1 ARM | 2.597% | 3.016% |
| 3/1 ARM | 2.917% | 3.555% |
| 30-year fixed-rate FHA | 2.562% | 3.398% |
| 30-year fixed-rate VA | 2.876% | 3.195% |
Mortgage Interest Rates vs. APR
The interest rate is the base percentage, charged by the lender, for borrowing whereas the APR, or annual percentage rate, takes more things into account, such as discounts and fees, in addition to the interest rate.
As such, the APR, is supposed to be a more accurate means of comparing loans given each lender has their own interest rates, fees, and discounts offered.
What Does This Mean for Buyers?
For buyers, if you were preapproved at 2.75% before rates went up to 3.5%, you should reach back out to your lender and get updated numbers on your good faith estimate. If you’re having a hard time, please let us know if you need a recommendation or someone to come in & strong-arm the situation.
If you aren’t yet preapproved, you should know that although this change is drastic, overall, these current rates are still historically low and likely the best we’ll see for some time to come. Meaning, you should kick things into high gear if you haven’t already.
What Does This Mean for Sellers?
For sellers, you want to make sure you price correctly, watch activity and feedback, and list the home in the early Spring market, or now if it’s ready, before rates shoot up closer to 4% (which is a possibility we are hearing).
Parting Thoughts
The purchase of a home is one of the biggest most of us will make in our lifetime, so you want to make sure you get the best deal possible (clearly). With so much up in the air, we are more than happy to offer assistance whether that be helping you through the process or simply offering a recommendation. Either way, we are here to help!
And don’t fret; you’ve got this!
Check back with us for more real estate blogs!
