New low rates could help 13M homeowners save

Published July 14, 2021
Better
byย Better

Mortgage News: New Low Rates Could Help 13M Homeowners Save


Hereโ€™s a look at the latest developments in the mortgage market this week.

  • Over 13M homeowners could save with rates below 3%
  • Home listings just beat 2019 levelsโ€”hereโ€™s how to make a winning offer
  • More homebuyers are opting for ARMs. Is it the right loan for you?
  • What to expect when you close on your loan

Over 13M homeowners could save with rates below 3%

Mortgage rates are at their lowest level since February, with the 30-year fixed rate hitting 2.9% last week. The drop could easily trigger more refinancing as it puts 13.9 million homeowners in a position to lower their rate by at least .75%. That alone would save $300 a month on average.

Mortgage rates often move with the yield of treasury bonds. Since the start of the pandemic, the Federal Reserve has been buying treasuries to keep the market moving and rates lower-than-usual. Last week, the yield of those treasuries dipped and rates followed.

Considering how much mortgage rates have zig zagged in the last few months, this dip could reverse course as soon as next week. More signs of economic recovery are popping upโ€”the latest jobs report shows more Americans are finding employment, and inflation is on the rise. Generally, good news for the economy means higher mortgage rates.

Making the move to lock now could be key. The average 30-year fixed rate is expected to rise to 3.4% by the end of the year, so savings may not last long. Find out how much you could lower your payments by checking out todayโ€™s Better Mortgage rates.

Home listings just beat 2019 levelsโ€”hereโ€™s how to make a winning offer

A fresh batch of homes hit the market in the last month, offering more selection for todayโ€™s shoppers. The real estate platform Redfin reported that new listings have surpassed 2019 levels for the first time since January.

While this is great news for the marketโ€™s record low inventory levels, competition is still fierce. Prices are at record highs with a median tag of $385,000, and sales move 23 days faster than this time last year. Any snags in the buying timeline can spell huge challenges for buyers.

The home appraisal process can be a common hang-up. If the seller's estimated value of a home doesn't align with the appraiser's assessment, it could derail the entire sale. In today's market, where prices are so high that many borrowers end up needing a larger loan than they initially planned for, it could cause a lender to jump ship, forcing the buyer to start from scratch.

Working with Better Real Estate and Better Mortgage means low appraisals may not threaten your chances of closing. With the new Better Appraisal Guarantee, the terms you lock in are the same terms you get when your loan funds, regardless of the appraised value. Buyers who qualify can put down a competitive offer by waiving the appraisal contingency altogetherโ€”without any risk of overpaying.

More homebuyers are opting for ARMs. Is it the right loan for you?

The adjustable-rate mortgage (ARM) is getting more popular with shoppers as prices rise around the country. Applications for adjustable-rate mortgages rose 12.5% year-over-year in the week ending June 18. They fell in following weeks, but could likely rise again thanks to the recent rate drop.

An ARM is a type of loan that temporarily locks in a rate for a set number of yearsโ€”usually 5 or 10. After that, the rate resets periodically, with caps in place to keep it from increasing too much at once. If a borrower sells their home or refinances within the fixed period, an ARM can be a great option. But itโ€™s worth noting the details that come with them to be sure.

To figure out if an ARM is right for you, ask yourself how long you plan to stick with the loan before selling, refinancing, or just paying it off. If that plan is less than 10 years, you may be in a great position to save with an adjustable rate. Check out todayโ€™s Better Mortgage ARM rates to see what your monthly payments would be, and take it from there.

What to expect when you close on your loan

Closing is an exciting last step before your mortgage is funded. While there are different closing requirements state-by-state, ultimately this is the day that you sign off on the final paperwork.

It always helps to know what to expect on closing dayโ€”and what kinds of delays to look out for. Itโ€™s common for financial or appraisal issues to pop up and slow down your timeline. In fact, 1 in 4 homebuyers experience a closing delay.

The Better Mortgage team, on the other hand, works hard to keep you on track to close from the start. In fact, if you donโ€™t close on your new home on time, Better Mortgage will give you $2,000. See terms and conditions for details.

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