There’s no question that inflation has cooled significantly compared to mid-2022 when the inflation rate hovered above 9%. However, we aren’t back to normal just yet. At 3.2%, today’s inflation rate is still well above the Fed’s target rate of 2%, resulting in the Federal Reserve’s benchmark rate remaining paused at a 23-year high. In turn, borrowers now face elevated interest rates on everything from credit cards to mortgage loans — especially compared to the rates that were offered in 2020 and 2021.
But the good news is that mortgage rates, in particular, have declined slightly over the last few months, making it more affordable to borrow money for a home. And, as the spring homebuying season kicks into high gear, many prospective buyers are starting the pre-approval process to secure a mortgage loan.
Finding the right mortgage loan goes beyond just getting the best mortgage rate, though. It’s also critical that you understand all the details, fees and requirements from your lender so you can make the best decision possible for your money. And that starts by asking some important questions.
Explore your top mortgage loan options online now.
10 important mortgage loan questions to ask this spring
If you want to make an informed decision on your mortgage loan this spring, here are 10 crucial questions you should ask your mortgage lender:
What are the current mortgage rates and fees?
It’s crucial to get a clear picture of the interest rate you qualify for and understand all the lender fees involved in the transaction. As part of this process, be sure to ask about the mortgage loan’s annual percentage rate (APR), which includes the interest rate plus other costs. And, given that today’s mortgage rates are hovering near 7%, don’t forget to inquire about discount points to buy down the rate.
Find the best mortgage loan rates you could qualify for today.
What are the different loan program options?
There are various mortgage products to choose from. For example, your lender may offer you conventional or jumbo mortgage loan options as well as government-backed mortgage loans, like Federal Housing Administration (FHA), U.S. Department of Agriculture (USDA) and U.S. Department of Veterans Affairs (VA) loans.
Each type of mortgage loan has pros and cons to consider, and your lender should explain the differences and qualifications for each. That way, you can choose the right fit based on your down payment amount, credit score and financial situation.
What is the required down payment minimum?
Down payment requirements can vary across mortgage loan programs, and depending on the amount of money you have to put down on the home, one mortgage loan could make more sense over another. So, be sure to find the minimum down payment percentages for each type of loan you’re considering, as well as the benefits of putting down a higher amount to avoid mortgage insurance.
You may also want to ask if you’re eligible for any down payment assistance programs, as these programs may be available for certain types of buyers or mortgage loans.
How much home can I afford?
Your lender will pre-approve you for a maximum mortgage loan amount based on your income, debts and credit. However, it’s important to understand that the amount you’re approved for is the maximum, and you need to know what monthly payment you can realistically afford.
With that in mind, be sure to ask your lender to run different home price scenarios with estimated payments to ensure that you’re comfortable with the potential costs each month and that they align with what you have budgeted for your mortgage payments.
What documentation is required?
Your lender will need various documentation, from tax returns and pay stubs to bank statements and gift letters, to verify your income, assets and other information that’s required to approve you for your mortgage loan. It can be helpful to get a full checklist of required paperwork so you can prepare in advance, helping to expedite the pre-approval process (and ultimately the loan approval process).
How long is the mortgage pre-approval valid?
Pre-approvals typically have an expiration date, which can vary by lender, but are often between 60 and 90 days. Ask your lender how long your mortgage loan preapproval is valid for and find out what the process is to get re-approved if your home search takes longer just in case there are issues with finding the right home in that time frame.
What are the estimated closing costs?
In addition to your down payment, you’ll need to pay closing costs, which can vary by lender, but typically amount to 2% to 5% of the home’s purchase price. Be sure to request a fee worksheet or estimate from your lender to understand this significant upfront expense.
And, in some cases, you may be able to negotiate with your lender to lower some of these closing costs and fees. Knowing what these costs are as you compare your loan and lender options can be useful as you determine whether it would be worth it to do so.
What is the rate lock period?
A mortgage rate lock guarantees that your quoted interest rate won’t increase for a set period, which is often between 30 and 60 days. As you navigate the mortgage lending process, be sure to find out the lender’s lock periods and associated fees in case you need an extended rate lock.
What are the steps after pre-approval?
Having clarity on the next steps after pre-approval is an important component of ensuring the mortgage lending process is a success. So, be sure to ask your lender about the typical timeline for what happens after pre-approval. That way you know how long you have to shop for homes, the timeline for having a home under contract, when you need to secure the appraisal and the estimated time it will take for the underwriting processes to get the final approval.
Are there any prepayment penalties?
These days, it’s rare for lenders to charge mortgage prepayment penalties. However, it’s still important to confirm there are no fees if you pay off your loan early or refinance down the road, so be sure to ask this question of your lender.
The bottom line
The mortgage process can be daunting, especially in today’s high-rate environment, but being an informed borrower is half the battle. So, as you navigate the mortgage lending process, don’t hesitate to ask your lender plenty of questions, as this will likely be one of the biggest financial decisions you’ll make. That’s why an experienced, communicative lender is key to making the right mortgage choice this spring homebuying season.
Angelica Leicht
Angelica Leicht is senior editor for CBS’ Moneywatch: Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.
I like interesting stories and I like interesting houses. I also like to believe I tell the former and have the latter. (Don’t we all?) So, when a book titled “Authentic Interiors: Rooms That Tell Stories” (Gibbs Smith, March 2024) hit my radar, I thought, “Shazam! My worlds collide!”
I dove into the 224-page, picture-rich hardcover, then rang up the author, interior designer Philip Gorrivan, to see if I could divine the secret to designing rooms that tell not just stories, but our stories. (Face it. Despite what they say, a lot of designers tell their stories.)
In his introduction, Gorrivan cites the 20th-century designer David Hicks who said, “The best rooms have something to say about the people who live in them.” The book then goes on to feature 14 client-inspired projects including the author’s own house.
“If you’re going to design your home, whether a grand house or a shoebox apartment, whatever the budget, make sure your interior space is an extension of who you are,” he said. “This, after all, is where you come home, sleep and live.”
Few would disagree. However, this is one of those easy-to-say, harder-to-do design maxims. In the wrong hands, the result could be ghastly. Some people’s stories just aren’t pretty. I turned to the pages for clues. For one couple — a screenwriter and newspaper editor — Gorrivan used posterized black-and-white images of famous faces. For a Brazilian couple’s New York apartment, he incorporated saturated tones from the tropical rain forest, painting walls in a lacquered emerald and incorporating fuchsia furnishings.
As with any author I interview, but especially this one, I was curious to learn the writer’s story. Where is he coming from? So, I asked Gorrivan, who has a house in Connecticut and an apartment in Manhattan, that and a few more questions:
Marni:Before we talk about other people’s stories, what’s yours? What was your early home like?
Philip: Because my parents had different interests, our house was a mix of antiques and modern furnishings. It was by no means “decorated.” We lived in Portland, Maine, where we had these long bleak winters. My family had this old farmhouse, which became a repository for family hand-me-downs and heirlooms. To amuse myself, I spent hours exploring all these pieces. I became visually tuned into furniture at a young age. I may have been the first 10-year-old to ask for a subscription to Architectural Digest.
Q: Interior design wasn’t your first career. When and why did you switch?
A: After college, I worked in sales, got married, had children and was working to pay the bills. When 9/11 hit, we were living in New York. It made me rethink everything. I decided then to do what I loved. I went to work for an interior design firm to learn the ropes, and after two years went out on my own. My break came when House & Gardens magazine asked me to design a room for a show home they were putting together. They had one room left, a 12-by-8-foot laundry room, the smallest room in the house. I made the most of it.
Q: Although your rooms tell your clients’ stories, you clearly have a signature look. How would you describe it?
A: I come from a love of textiles and fabrics, color and pattern. I like to align with great design firms of the 20th century to create a look I call classic modern, a mix of periods that speak to both the home and the homeowner.
Q: Color indeed! Not everyone can pull off Chinese red lacquered walls.
A: While I have a lot of respect for neutrals and earth tones, I especially like mixing in strong color. Color is powerful and transformative. The chapter titled “Reinvention,” for example, features a New York apartment we made over after the owner got divorced. He was living in the same place he’d shared with his ex-wife and wanted it to feel completely different. Painting the walls bright spring green felt like a new beginning.
Q:Beautiful interior design books cover coffee tables everywhere. Why another one? How is your book different?
A: The word “authentic” is in the title because it’s important to me. We see a lot of pastiche in the design world, where designers copy and paste the work of others. Authenticity is critical in any creative endeavor. I wanted to convey that and emphasize that a successful interior should speak to the architecture of the house or apartment, to the surrounding geography, and ultimately to the homeowner.
Q:What if the homeowner is a couple with different interests and tastes?
A: Every couple disagrees on looks. We negotiate. A successful home design includes elements that reflect all inhabitants, which ultimately makes the interior even more unique.
Q:What makes you cringe when you walk into some homes?
A: Furnishings that are totally out of scale. A sofa that is way too big or art that is too small can ruin a room.
Q:How can we inject our story into our homes, whether that reflects our professions, interests or heritage?
A: Think of what you love and want to surround yourself with: your children, your pets, your travels, your roots. It may not be your profession. Some clients don’t want any reminders of their work once they get home. And you’d be surprised how many want to decorate using the colors of their favorite sports team. Heritage also matters. I always want to know where my clients grew up.
Q:What do you want readers to take away?
A: Though the book is filled with pictures, I hope readers look at the words, too. I hope they read the different stories and see how stories can come alive in design. I hope they see how the best designs come from the inside out, and come away thinking, maybe I can do this, too?
Marni Jameson is the author of seven books including the newly released Rightsize Today to Create Your Best Life Tomorrow, What to Do With Everything You Own to Leave the Legacy You Want.
“Authentic Interiors” by Philip Gorrivan (Gibbs Smith, March 2024, $45, 224 pages) “provides much to savor,” says Publishers Weekly. Photo courtesy Gibbs Smith. (Handout via Marni Jameson)
Building your dream home from the ground up is a great way to make sure it meets all your expectations. Securing a home construction loan can assist you in realizing your plans, but you need to know the specifics that come with these types of loans.
Here’s an overview of what you should know when obtaining a construction loan.
What is a construction loan?
A construction loan is a type of loan specifically designed to finance the cost of building a new home or renovation of an existing property. It’s a short-term loan with a variable interest rate, and is typically used during the construction phase of a project.
Unlike a traditional mortgage, construction loans are disbursed in installments as the construction progresses, rather than as a lump sum. This helps to minimize the risk for both the lender and the borrower, as the loan amount is based on the actual costs of construction.
How do construction loans work?
Construction loans are typically offered by specialized lenders or banks and are often secured by the property being built. Borrowers are usually required to provide a detailed construction plan, as well as a budget and timeline for the project. The lender will then release funds as each construction milestone is completed and inspected.
At the end of the construction process, the construction loan will typically be converted into a permanent mortgage. This conversion process can occur automatically or require a separate application and approval process, depending on the lender’s requirements.
3 Types of Home Construction Loans
There are three main types of home construction loans: construction-to-permanent, construction-only, and renovation.
Construction-to-Permanent Loan
With this type of home construction loan, once the home is built, the loan converts to a permanent mortgage. You typically only have to pay closing costs once, which can save you money.
You can also choose to pay interest during the building phase. However, it’s typically a variable interest rate, so your payments will fluctuate. After the home is built, and your construction loan converts to a permanent mortgage, you might be able to choose whether you want a variable rate or a fixed rate.
You may want to consider this type of loan if you have a feasible plan for your house’s construction, and you want to pay it back over time with a reliable monthly payment.
Construction-Only Loan
This type of loan requires full repayment at the end of the construction phase, rather than automatic conversion to a mortgage. This means that you’ll incur two sets of closing costs and have to secure approval for two separate loans.
However, a construction-only loan may require a smaller down payment compared to a construction-to-permanent loan. If you already own a home, you may consider obtaining a construction-only loan initially and waiting to sell your current home to accumulate a larger down payment for a mortgage.
Construction-only loans can be a suitable option for individuals who currently have limited funds but expect to have more in the future. After completing construction, you can apply for a mortgage to pay off the loan.
One potential drawback of this type of loan is that if your financial or credit situation changes during construction, you may not qualify for a mortgage large enough to repay the loan. This can lead to new problems, including the possibility of losing your home before you even move in.
Renovation Construction Loan
Rather than helping you build something new, a renovation loan is designed to help you cover the costs of a major remodel. If you want to turn a fixer-upper into the home of your dreams, but aren’t sure if you have the money for renovations, this type of loan can help.
It’s important to note that these aren’t home improvement loans. A home improvement loan often deals with smaller remodels and is based on how much equity you currently have in the home. Renovation construction loans are about major overhauls.
Typically, you’ll get a loan big enough to cover the costs of renovations as a mortgage. You only apply for one loan, and it’s based on the likely value of the home after the remodel is finished. This can be a big help if you don’t want to try to finance the cost of upgrades after you buy the house.
Expenses Covered by Construction Loans
In general, you’ll find that most construction loans pay for various aspects of a project, including:
Obtaining the land (or the fixer-upper if you’re getting a renovation loan)
Getting the plans for the home
Applying for the permits
Paying the fees associated with construction
Contingency reserves for covering unexpected costs
Closing costs
You might also be able to have interest reserves built into your construction loan if you would rather not make interest payments while your home is being built or renovated.
The idea is that everything you need to complete your home, whether new-built or a renovation, is wrapped up in the loan.
Create a Plan for Your Custom Home
When building a home, you can’t just ask a lender for an appraisal or just get approved for a certain amount. Construction loan lenders expect to see a plan for the construction of the home.
When you apply for a home construction loan, you’ll need to let your lender know the following information:
Size of the home and the lot
Placement of the lot
Home plans (possibly include blueprints)
Materials used to build the home
Types of renovations you plan to make (for an applicable loan)
Timeline for completing the home
Contractors that will be hired
Lenders will dig into this information to decide if you’re a good risk. They want to know that the home, or the lot, will at least be worth something if you default on the loan. Part of the process is understanding that the home will at least be worth what you’re borrowing once it’s finished.
At each stage of construction, and before disbursement is made, the work will have to be inspected. If you choose a general contractor that’s experienced and respected, they can help you provide needed information to your lender, and you can be reasonably assured that they will do good work.
Qualifying for a Home Construction Loan
Now that you have a plan for your new home, it’s time to qualify for your construction loan. In many ways, the process is the same as qualifying for a traditional mortgage loan. The construction loan lender will review your financial situation and decide if you present a relatively low risk. Some of the things that a construction loan provider looks at include:
Credit score: This is the most important element of any home loan, and it’s no different with construction loans. In fact, because there might not be anything of tangible value before construction, you might need an even higher credit score. You typically need a minimum credit score of 680 to qualify, so you need to improve your credit score if you’re not there yet.
Debt-to-income (DTI) ratio: As with a regular mortgage, the lower your debt-to-income ratio, the better off you’ll be. Most lenders require that your DTI be no more than 45% of your gross monthly income.
Down payment: While you might be able to get by with 5% or less for a down payment with traditional mortgages (FHA, USDA, and VA loans famously come with much lower down payments), construction loans are a different story. You’ll likely have to put down at least 20% to make it happen. In some cases, though, as with a renovation loan, you might get away with a lower down payment.
By planning ahead and making sure your finances are in order, you have a better chance of qualifying for a construction loan.
Prepare for a Longer Closing Period
Realize that there are many moving parts to your home construction loan. It’s not just you and your lender involved. You’ve got a builder or contractor as part of the arrangement, and you’re not going to get a lump sum. Instead, the lender will evaluate you and the contractor you choose separately.
Additionally, a timeline for disbursements needs to be set up. Moreover, a lender might need to consider insurance related to the process. Plus, whether you choose a construction-to-permanent or construction-only loan matters a great deal as you negotiate with a lender about your terms.
As a result of these different aspects of construction loans, you might have to allow for a longer closing period. Additionally, you’re likely to see delays and additional costs during the building portion, so making sure you have adequate contingency reserves built into your new home is vital.
Bottom Line
With a construction loan, you can turn your dream home vision into a reality, whether building from the ground up or renovating a fixer-upper. Be aware, however, that a construction loan entails different terms and conditions.
Your lender will not simply grant you the entire loan amount without first ensuring your ability to use it responsibly. You must prove your financial capability and the viability of your construction project. Your lender will keep a close eye on the allocation of funds as the project progresses.
If you have a good understanding of how a construction loan operates, it can be a valuable tool in ensuring you achieve the home of your dreams.
See also: Is It Cheaper to Build or Buy a House?
Frequently Asked Questions
How do I qualify for a construction loan?
To qualify for a construction loan, you will typically need to have a good credit score and a sufficient amount of equity in your property (if you are building on land that you already own). You will also need to provide a detailed construction plan and budget, as well as proof of your ability to repay the loan.
How long does it take to get a construction loan?
The process of getting a construction loan can vary in length depending on the lender and the specifics of your situation. In general, it can take several weeks or even months to complete the application process and receive approval for a construction loan.
How much can I borrow with a construction loan?
The loan amount you can obtain through a construction loan is based on various factors including your credit score, the worth of the property, and your equity in the property. Usually, borrowers can expect to secure up to 80% of the property value. However, the loan amount can differ based on the lender’s policies.
How are funds from a construction loan distributed?
The distribution of funds from a construction loan is typically done in stages, based on the progress of the construction project. The lender will release funds as specific milestones are reached, such as the completion of the foundation, the rough framing, or the final inspection. This process helps to ensure that the funds are used for the intended purposes and that the construction project is proceeding as planned.
Before each release of funds, the lender may require an inspection to verify that the work has been completed to their satisfaction. The exact terms of the distribution of funds may vary based on the lender and the specifics of the loan agreement.
Are construction loans more expensive than other types of loans?
Construction loans can carry higher interest rates and fees due to the higher risk for the lender. However, the total cost of the loan will vary based on the lender, loan type, and loan terms.
Can I use a construction loan to remodel my existing home?
Yes, construction loans can be utilized for renovating an existing home too. Normally, those borrowing must present a comprehensive renovation plan, cost estimate, and demonstrate their repayment capability.
The real estate landscape in the United States is on the brink of significant transformation following the National Association of Realtors’ (NAR) announcement of a sweeping nationwide settlement. The landmark $418 million agreement aims to dismantle long standing industry practices accused of artificially inflating agent commissions, potentially reshaping the way Americans buy and sell homes … [Read more…]
The home buying process involves many steps, but it always starts with getting preapproved for a mortgage. A preapproval letter shows that a lender has checked your credit report and approved you to take out a mortgage.
It can be tempting to skip over the mortgage preapproval process and go straight to looking at potential homes, but this is almost always a mistake. Getting preapproved will ensure that real estate agents and home sellers know you’re a serious buyer. It will also give you more room to negotiate on your offer.
Plus, preapproval gives you a better idea of what kind of home you can afford to buy. Let’s look more closely at what mortgage preapproval is and how you can get started.
How does a preapproval letter work?
In the home-buying process, a preapproval letter serves as tangible proof to potential sellers that the borrower has secured financing. This letter is generated by a lender after evaluating a borrower’s financial information, including credit score, income, and assets. It’s an assurance to sellers that the borrower is financially capable of following through on the purchase.
The preapproval process starts with the borrower submitting an application to the lender, who then conducts a thorough evaluation of the borrower’s finances. Based on this information, the lender will determine the maximum loan amount for which the borrower is eligible and issue the preapproval letter.
Preapproval letters are valid for a specified amount of time – usually between 60 and 90 days. During this time, the borrower can confidently make an offer on a property, demonstrating their commitment and financial stability to the seller.
While a preapproval letter is not a guarantee, it’s an important step in streamlining the home-buying process. It can make all the difference in helping the borrower secure their dream home.
Why You Should Get a Preapproval Letter
The process of buying a home can be overwhelming and stressful, but obtaining a preapproval letter can help alleviate some of those worries. This letter serves as a crucial first step in the home-buying journey, providing potential sellers with the assurance that you are a serious and financially capable buyer.
By taking the time to secure a preapproval letter, you will have a much clearer understanding of your borrowing power and what you can afford. Not only does a preapproval letter give you a competitive edge in a crowded housing market, but it can also save you time and heartache in the long run.
With this letter in hand, you can confidently make an offer on a property. This is because you have taken the necessary steps to secure financing and increase your chances of having your offer accepted.
So, whether you’re a first-time homebuyer or an experienced real estate investor, getting a mortgage preapproval letter should be at the top of your to-do list.
Preparing for Preapproval
Getting preapproved alerts you to any potential problems with your credit or income. Many people have issues with their credit that they need to clear up before obtaining a mortgage will be possible.
If you know about these issues, you can take the necessary steps to clean up your credit first. It’s much harder if you go house hunting first, find a home you love, and then realize you’re not prepared to buy it just yet.
For that reason, preapproval will help you be taken more seriously by sellers and listing agents. Sellers want to accept an offer that they are reasonably certain will go through.
Home loan preapproval assures them that you’re in a position to be able to close on the home. This is especially important in a seller’s market where there could be multiple offers on one home.
And finally, being preapproved for a mortgage gives you more clarity when you start looking at different homes. Without a preapproval letter, you’re really just guessing when it comes to the type of home you think you can afford. Getting preapproved takes all the guesswork out of it.
Preapproval vs. Prequalification
Many people use the terms preapproval and prequalification interchangeably, but they are two different things. Getting prequalified is similar to preapproval, but it’s not quite as accurate or thorough.
When you get prequalified for a mortgage, your lender won’t pull your credit and won’t ask for as much information about your finances. This obviously makes it much less time-intensive for you, but it also means that the information you receive is an estimate that could change.
In comparison, with preapproval, your lender will check your credit and do a more thorough examination of your finances. Because this process is much more comprehensive, you’ll receive a more accurate estimate of how much you’re approved to borrow.
What You Need for a Successful Mortgage Preapproval
Your loan officer will require a lot of documentation before they preapprove you for a mortgage. This can be quite tedious.
But the good news is, you already have access to all the information needed. So, it’s really just a matter of gathering all the necessary paperwork to submit to your lender.
Here is an overview of the documents and information you’ll need to get preapproved:
A good credit score: Unless you’re applying for an FHA loan or VA loan, you’re going to need a good credit score to get preapproved for a mortgage. Most mortgage lenders require a minimum credit score of 620 to qualify. However, you’ll receive the lowest interest rate if your credit score is 760 or higher.
Employment history: Your mortgage lender will want to see proof of employment before they’ll be willing to preapprove you for a mortgage. You’ll need to provide copies of your tax returns as well as your annual W-2. Your lender may even contact your employer to verify your employment status and income.
Proof of assets: You’ll also need to provide evidence that you can afford to pay the down payment and closing costs on your new home. This can typically be done by providing pay stubs, tax returns, or bank statements. If you aren’t able to pay the standard 20% down payment, you must purchase private mortgage insurance (PMI).
Your debt-to-income ratio: Debt-to-income ratio (DTI) is the percentage of gross monthly income that goes toward debt payments, such as credit cards, auto loans, and student loans. You must let your lender know of your monthly debts, since this will affect your debt-to-income ratio. You can provide a list with all of your outstanding debt, as well as the loan balance and minimum monthly payments.
Additional documents: Your lender will likely want additional information, like your Social Security Number and your driver’s license. And if you’ve been through a divorce or owe alimony payments, you’ll need to provide documentation of that as well.
How to Get Preapproved for Your Mortgage
Hopefully, by this point, you understand what mortgage preapproval is and why it’s so important. Here are the five steps you’ll need to take to get preapproved for a mortgage loan.
1. Check your credit report
Before you even begin the preapproval process, it’s a good idea to request a copy of your credit report from the three major credit bureaus. You can receive your free annual copies at AnnualCreditReport.com.
That way, you’ll know where you stand when it comes to your credit history. And this will give you a chance to review your credit report for any errors or delinquent accounts. It’s a good idea to resolve these issues before applying for mortgage preapproval.
2. Gather the necessary documentation
Take the time to gather the necessary paperwork before you approach your lender. This ensures that you go into the mortgage process prepared, and will help things move along much more smoothly.
3. Submit your application
Now it’s time to apply for preapproval. Your loan officer may have you apply for preapproval online. Answer all the questions as accurately as you can, and submit all the necessary paperwork.
It may be a good idea to apply for preapproval with multiple lenders. This allows you to compare your options and get the most favorable terms possible.
4. Receive your offers
Once your lender has reviewed your credit score and financial information, you’ll receive several recommended mortgage options. At this point, you’ll see how much you’ve been approved for and your recommended loan types. You’ll also get an idea of what your estimated monthly mortgage payment and interest rate might be.
5. Receive your preapproval letter
Once you’ve chosen your mortgage option, your lender will send you a preapproval letter. You can take this letter with you as you begin shopping for your home.
Bottom Line
Applying for mortgage preapproval is probably the least exciting part of the mortgage process, but it’s an essential first step every new homebuyer should take. Getting a preapproval letter will let you know what kind of home you can afford, and it will give you an advantage when you’re negotiating with sellers.
However, keep in mind that a mortgage preapproval is not a guarantee. If you suddenly lose your job or your financial situation unexpectedly changes, then the previous offer will no longer stand. But it’s as close to a guarantee as you can get before finally closing on your home.
Frequently Asked Questions
Why does it matter if I receive a preapproval letter?
It’s essential to get preapproved for your mortgage for a couple of reasons. First, it gives you a realistic picture of the type of house you can afford. And sellers will take your offer more seriously if you’ve already been preapproved for a mortgage.
What is the difference between a mortgage prequalification and preapproval?
Getting prequalified for a mortgage is much less thorough than a preapproval. Your lender won’t run a credit check, and they won’t review your finances as carefully. This makes it much less accurate than receiving a preapproval letter.
If you go through the process of getting preapproved, then it’s likely you’ll be able to close on a home, unless something drastic happens. But if you’ve only been prequalified, your offer could change once the lender does a more in-depth credit check and financial review.
When should I get preapproved?
You should get preapproved before you start looking at homes. That way, you’ll know what kind of home you can afford before you start shopping for a new home.
Will getting preapproved for a mortgage hurt my credit score?
As part of the preapproval process, your lender will conduct a hard inquiry on your credit report. Typically, this can hurt your credit score slightly. However, multiple hard inquiries for a home loan shouldn’t hurt your credit score.
Average mortgage rates edged higher yesterday. Unfortunately, it was the sixth consecutive business day on which they’ve risen.
Earlier this morning, markets were signaling that mortgage rates today might barely move. However, these early mini-trends frequently alter speed or direction as the hours pass.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 30-year fixed
7.15%
7.17%
Unchanged
Conventional 15-year fixed
6.57%
6.61%
-0.04
Conventional 20-year fixed
7.16%
7.19%
+0.02
Conventional 10-year fixed
6.63%
6.66%
-0.05
30-year fixed FHA
6.51%
7.19%
Unchanged
30-year fixed VA
6.61%
6.72%
-0.03
5/1 ARM Conventional
6.3%
7.39%
Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
Tomorrow’s Federal Reserve events (see below) could make a big difference to mortgage rates in the near and medium terms. But, right now, I’m pessimistic about our seeing a sustained downward trend until the summer. And some wonder if the fall might be a more realistic timeframe.
So, for now, my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes held steady again at 4.32%. (Neutral for mortgage rates. However, yields were rising this morning.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were mixed this morning. (Neutral for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices increased to $83.18 from $81.35 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices inched down to $2,156 from $2,159 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — dropped to 69 from 75 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to hold close to steady. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
Tomorrow
I covered yesterday the three Federal Reserve events due early tomorrow afternoon:
2 p.m. Eastern — Rate announcement and report publications
2 p.m. Eastern — Summary of Economic Projects publication. This occurs only quarterly and includes a dot plot
I’ll brief you more fully on those tomorrow morning. That way you’ll know what to look out for before it’s too late to act.
Personally, I’m not very hopeful about the impact of the Fed’s events on mortgage rates. Of course, I can’t be sure what they’ll bring. But recent economic data has likely reinforced the central bank’s natural caution. And I suspect that it may signal later and fewer cuts in general interest rates this year than markets have been expecting.
If I’m right, that could be seriously bad for mortgage rates. So, let’s hope I’m wrong.
Today and later in the week
I’ll be surprised if today’s economic reports move mortgage rates much. They cover February’s housing starts and building permits. It’s not that those data are unimportant. However, they rarely attract the attention of the investors who largely determine mortgage rates.
We have to wait until Thursday for a couple of reports that sometimes affect mortgage rates. They’re two March purchasing managers’ indexes (PMIs) from S&P. One is for the services sector and the other covers manufacturing. I’ll brief you on those tomorrow morning.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Mar. 14 report put that same weekly average at 6.74% down from the previous week’s 6.88%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Feb. 12 and the MBA’s on Feb. 20.
Forecaster
Q1/24
Q2/24
Q3/24
Q4/24
Fannie Mae
6.5%
6.3%
6.1%
5.9%
MBA
6.9%
6.6%
6.3%
6.1%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Inside: Discover the keys to successful budgeting with our guide on budget tools, adjusting strategies, and setting financial goals for transformative money management. Creating budgets with your expenses allows you freedom.
Budgeting is one of the parts of managing money that everyone dreads. However, a well-thought-out budget lays the groundwork for mindful spending that reflects your values and paves the way toward accumulating significant wealth.
So, you need to learn the key components of a successful budget.
Budgeting is the cornerstone of building a sustainable financial future where every dollar is assigned a purpose, ensuring that saving and investing become routine, not afterthoughts.
By committing to the principles of disciplined budget tracking and adjustment, you can craft a monetary trajectory that systematically demolishes debt and expands your assets.
Thus, inching you closer to the coveted millionaire status that started with no money with every financial decision you make.
Mastering the art of budgeting requires patience, insight, and the will to see your financial goals come to fruition.
What is the key to good budgeting?
The cornerstone of good budgeting lies in understanding your monetary landscape and wielding control over it.
This means not just noting down numbers, but analyzing your income, expenses, and financial objectives. It’s about crafting a financial map that leads you to your desired destination, be it debt freedom, investment, or saving for something grand.
Remember, a sturdy budget plan is your ally in the financial journey—it helps you stay disciplined, steer clear of fiscal pitfalls, and ensure that your hard-earned money is working for you.
How Mastering Your Finances Can Transform Your Life
First of all, I can attest to starting a budget, sticking to the process, and how my life is now much different than I started. It was hard work and always not fun. But, now, I can experience time freedom like never before.
The magic of mastering your finances is that it does more than just balance your books; it has the potential to utterly transform your life.
Empowered by financial knowledge and a well-executed budget, you can pave the path to your dreams, whether that’s retiring early, traveling the world, or providing a stable future for your loved ones. It instills a sense of financial confidence and peace of mind, knowing that you are in control of your financial destiny.
Element 1: Set Clear Financial Objectives
Setting clear financial goals is like having a compass that guides you through your journey. It involves delineating what you aspire to achieve with your money both in the short term and long term.
You need to plan for and consider variables like inflation and economic shifts.
Identifying Short-Term and Long-Term Financial Goals
To cover your bases, you need to address both immediate and future needs:
Identifying short-term financial goals, typically achievable within one to three years like saving for a vacation or paying off credit card debt.
Long-term financial goals, are usually set for five years or more, such as saving for retirement or a child’s education.
The Role of Specific Goals in Successful Budgeting
Having specific financial goals ensures that each dollar in your budget is assigned a clear purpose, enhancing the likelihood of sticking to your budgeting plan and achieving financial stability.
You can set precise targets such as saving a particular amount for a home down payment and measure your progress and adjust your spending habits accordingly. Thus, making the budgeting process more effective and goal-oriented.
Element 2: Track Your Income and Expenses Religiously
Tracking my income and expenses allows me to identify patterns in my financial behavior. Thus, I can make informed decisions to ensure I adhere to my budget and achieve my monetary goals.
This forms a clear roadmap for financial growth and stability.
Tools and Strategies for Keeping Tabs on Financial Flow
You need to find a way to track your money.
Whether it is utilizing financial software/budgeting apps or paper and pencils. Either allows for efficient tracking of expenses and income, ensuring that you maintain a clear view of your cash flow.
Start with how to budget with a low income.
Differentiating Between Essential and Non-Essential Spending
When creating a budget, it’s vital to differentiate between fixed spending on necessities like housing, utilities, groceries, and transportation, and non-essential spending on items such as dining out, entertainment, and other luxury items.
Essential expenses are critical for maintaining your basic living standards and meeting financial obligations.
Whereas non-essential expenses are discretionary and can often be adjusted or eliminated to achieve financial goals.
By tracking actual expenditure and distinguishing between these two categories, you can prioritize funding towards essentials and savings, ensuring financial stability and progress towards long-term objectives. Just like I have.
Element 3: Prioritize Saving and Prepare for Emergencies
By prioritizing savings, I am investing in my future, taking advantage of compound interest, and building a foundation that helps secure my long-term financial goals. Unfortunately, this took me a while to learn, and the most important financial advice for young adults.
Putting a portion of my income into savings consistently is like paying a bill that benefits my future self, which in turn provides peace of mind and financial independence.
Deciding How Much to Save and Where to Allocate Funds
Apply the 50/30/20 budgeting rule to allocate funds wisely, directing at least 20% of your income towards savings.
The goal is to increase your savings percentage each year. To maximize your savings, analyze your expenses frequently, dividing them by necessity and frequency, to ensure that your saving goals are met without compromising your essential needs.
The Significance of an Emergency Fund in Financial Planning
An emergency fund is a financial lifeline, offering stability in the face of unforeseen circumstances such as job loss or medical emergencies, ensuring that such events don’t derail your financial plans.
Additionally, an emergency fund contributes to peace of mind, knowing they have a monetary cushion to fall back on.
A rainy day fund, or holding three to six months’ worth of living expenses, this fund acts as a buffer against debt, reducing the need to rely on credit cards or loans during crises.
Element 4: Regularly Monitor and Adjust Your Budget
I regularly monitor and adjust my budget to maintain a clear understanding of my financial health and to catch any discrepancies between my planned and actual expenditures. This consistent review allows me to quickly identify areas where I can optimize spending or need to reallocate funds.
Then, I ensure my financial goals remain within reach and adaptable to life’s changing circumstances.
Techniques for Reviewing Budget Performance Over Time
Implement a system for tracking financial transactions that aligns with your budget categories, which provides clear data to analyze spending habits and make informed adjustments as needed.
To effectively review budget performance over time, I recommend scheduling routine assessments, such as monthly or quarterly reviews.
Compare actual expenses with your budgeted figures to pinpoint variances and trends.
Dealing with Financial Changes and Maintaining Budget Discipline
Life’s unpredictable nature means financial conditions can fluctuate, demanding swift adjustments to your budget for events such as a new addition to the family or changes in employment.
These changes could be an increase in income or an unplanned decrease in annual net income.
You must embrace flexibility while holding onto your long-term objectives allowing you to navigate unexpected financial changes without deviating from the path of fiscal responsibility and discipline.
Element 5: Embrace Technology and Automation in Budgeting
I use Quicken to manage my budgeting because it provides an all-encompassing financial picture by integrating income, expenses, investments, and retirement accounts in one place.
The software automates expense tracking and categorization, making it easier for me to monitor my financial health and adjust my spending habits accordingly.
Budgeting Apps and Digital Tools That Simplify Managing Finances
Budgeting apps like YNAB leverage technology to automatically track user expenses by linking to bank accounts, simplifying the process of managing personal finances with features such as expense categorization and financial planning tools.
With features such as bill reminders, debt payoff calculators, and investment trackers, these budgeting apps not only streamline financial oversight but also assist users in setting and achieving their financial goals.
The Advantages of Automating Savings and Bill Payments
This is something I do all the time! Automate your bills and contribute to your savings.
As such, this is a highly efficient method to streamline your finances and ensure that you consistently put your money to work like you planned.
This approach not only helps in avoiding late fees by timely paying bills but also reduces the risk of human error or forgetfulness.
FAQ: Unwrapping the Mysteries of Budgeting
The first method is to start a no spend challenge. This will help you cut back on non-essential spending, such as dining out or premium entertainment subscriptions.
Next, start to live on a shoestring budget. This will help you to compare and negotiate rates for recurring bills like utilities, insurance, and phone plans to secure lower payments.
Additionally, employing cost-saving methods such as utilizing coupons, buying in bulk, and opting for generic brands can significantly decrease monthly grocery expenses.
It’s wise to review and adjust your budget at least once a year or with any major changes. This helps ensure your budget stays aligned with any shifts in income, unexpected expenses, or alterations to your financial goals.
If your lifestyle or income varies significantly, more frequent adjustments might be necessary.
Just remember, it will take a few months for your budget to work.
If you find sticking to your budget is a constant struggle, it might be time to reach out for help. Consider partnering with a budgeting buddy or joining an online community for accountability.
Aim to understand what triggers your spending and devise strategies to avoid these pitfalls. Adjust your budget where needed and prioritize building a buffer for unforeseen expenses.
Creating a budget helps manage finances with a clear view of income and expenses, reduces unnecessary spending, and facilitates goal setting.
It acts as a roadmap for managing monthly financial flows, encourages disciplined spending, and aids in achieving long-term financial aspirations with less stress.
Elements of Budgeting You Will Embrace?
You might wonder, is always keeping a close eye on your finances truly worth it? The answer is a resounding yes.
Gaining mastery over your personal finances is like being the captain of your destiny in the vast sea of economic uncertainty. It’s not just about surviving; it’s about thriving. The result is often an enriched life, free from the shackles of financial stress.
Financial literacy allows you to make smarter choices and enables you to capitalize on opportunities that come your way.
Imagine breaking free from living paycheck to paycheck or being able to take that dream vacation without plunging into debt. These are not just dreams. They can become your reality with financial mastery. It’s about creating a life where you call the shots, secure from the economic twists and turns life may throw at you.
Find success with the zero based budgeting method.
I have done it. And you can too.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Are you wondering where to sell jewelry that you don’t need? Here are the best places to sell jewelry online and near you to make extra money. If you want to sell your stuff and make money, you can sell engagement rings, necklaces, rings, bracelets, and whatever else you have. Selling jewelry can help you…
Are you wondering where to sell jewelry that you don’t need? Here are the best places to sell jewelry online and near you to make extra money.
If you want to sell your stuff and make money, you can sell engagement rings, necklaces, rings, bracelets, and whatever else you have.
Selling jewelry can help you make money when you have items that you don’t need anymore. There are different ways to do it, both online and in your local area.
You can use websites like eBay or Facebook Marketplace for a broad audience. If you have expensive jewelry, sites like Worthy or TheRealReal might be a good fit. You can also sell directly to local places like jewelry stores, pawn shops, or at craft fairs, if you need cash right away. They all have their advantages and disadvantages, and I will be going over each below.
Best Places To Sell Jewelry Online and In Person
Below are the best places to sell jewelry online through selling apps and online marketplaces, as well as in person near you.
1. Worthy
I think that one of the best places to sell jewelry online is Worthy.
Selling jewelry like diamond engagement rings or fancy watches can be a way to make money on jewelry that you do not need anymore.
Worthy uses an auction setup, which means many people will see your jewelry, with a good chance of getting a higher price than at your local pawn shop or other online marketplaces.
You can sell items like the below on Worthy:
Earrings
Wedding or engagement rings
Necklaces, pearls, and more
Bracelets
Loose diamonds and gemstones
Watches
You start by telling Worthy what you’ve got (necklace, ring, etc.). They give you free shipping (insurance included) to send it to them. Once your jewelry is in their hands, they clean it up, have it evaluated, take some quality photos, and even get an appraisal.
You get to set a minimum price you’re okay with – called a reserve price – before your jewelry hits the online auction stage.
The whole process typically takes around 2 weeks from shipping to getting paid.
2. Local jewelry stores
When you decide to sell your jewelry, one way is with local jewelry stores. These shops tend to have personalized service and can give you immediate payment for your jewelry pieces. So, if you want to sell your jewelry in person, then this may be the best option for you.
You’ll want to start by researching local jewelry stores near you with good reputations, such as by looking for reviews online or asking people you know for recommendations.
Prior to visiting, understand the value of your jewelry. Some stores might do appraisals, but getting an independent one is often better for comparison so that you know how much money you should be asking for.
And, don’t hesitate to negotiate the price offered. Store owners expect it, and you might be able to get more money for your jewelry.
Some local stores offer trade-in options too. You might receive a higher value if you choose store credit instead of cash.
Make sure to bring your ID with you, as most jewelry stores will require it to process the transaction.
By choosing to sell your jewelry locally, you can typically make money a lot faster than if you sold your jewelry online, which is a huge benefit.
3. Pawn shops
If you want to know where to sell jewelry near you for cash, then pawn shops are typically the first choice.
Pawn shops are local businesses that give cash right away for items, such as fine jewelry, high-end collectibles, and electronics. Pawn shops operate by providing you with a loan based on the collateral value of your item or by purchasing it from you outright.
At a pawn shop, you’ll find a process that’s usually quick and straightforward. Whether you decide to pawn or sell, the staff will assess your jewelry’s value. This value depends on current market prices, the item’s condition, and more. Gold, silver, platinum, diamonds, and gemstones are typically accepted, regardless of their condition.
Before you visit, clean your jewelry to make sure it looks its best, and gather any certifications or paperwork that verifies its authenticity or value. This preparation can help you get a better offer.
Selling vs. pawning:
Selling: You receive cash immediately for your item without any obligation to repay.
Pawning: You get a loan based on the value of your jewelry, with the chance to reclaim your item once you repay the loan plus interest.
4. Selling at auctions
If you want to know where to sell your jewelry to get the most amount of money, then an auction may be it because there is usually a wide audience to bid on your pieces.
You will want to find an auction house and contact a jewelry specialist. It’s important to understand that your jewelry will be sold to the highest bidder once the auctioneer concludes the bidding.
Fees vary, so it’s important to ask about buyer’s premiums and seller’s commissions, as these will impact your final take-home amount. Also, carefully read the terms and conditions before you agree to auction your jewelry, as you need to be aware of payment procedures and timing.
5. eBay
If you’re thinking about selling your jewelry, eBay can be a good place to sell it. It’s an online marketplace (I’m sure you’ve heard of it) with lots of people looking for all different kinds of things around the world.
I have personally sold many items on eBay over the years, including jewelry (nothing too expensive, as I’ve never had expensive jewelry, but there is more expensive jewelry listed on eBay as well). It’s an easy way to list your jewelry online and see if people around the world are interested in buying it.
When you want to sell, take clear pictures of your jewelry from all sides and focus on any logos, textures, or stones. You can also show how the jewelry looks on real people or mannequins to help buyers see how it fits.
To price your pieces competitively, research what similar items are selling for. This may include looking at sold listings to understand how other sellers title and describe their items.
eBay charges a final value fee when your jewelry sells, so factor this into your pricing. With the right approach, eBay can be the perfect place to earn money while clearing out your jewelry box.
6. Consignment shops
Consignment shops are another popular place to sell jewelry.
Consignment means the shop will sell your jewelry for you and take a percentage of the sale price as their fee. This fee can range from 10% to 70%, so it’s important to ask about the commission rates before agreeing to sell your items.
When choosing a consignment shop, remember to:
Check their reputation and reviews.
Understand their commission rates and payment methods.
Ask about their process for valuing jewelry.
Ask about how they secure and insure your items while in their possession, just in case a customer walks away with it.
What makes consignment shops different from the others is that you will not receive any money until someone actually buys the jewelry. So, if it’s an in-person consignment shop, that could be weeks or even months.
7. Yard sales
When you’re looking to sell your costume or lower-value jewelry, you may want to set up a yard sale.
These local events are perfect for selling items that range from playful dress-up accessories to the everyday pieces you no longer wear.
I recommend putting a mirror near where you have your jewelry for sale at your garage sale so that people can see how they look with your jewelry. This can help on-the-spot decisions and give individuals a “try before you buy” experience.
Now, jewelry at a yard sale typically does not sell for much. You may get just a few dollars for your jewelry pieces. But, if you have a lot of jewelry that is not worth a lot, this is an option to sell it fast and earn at least a little bit of money.
8. Facebook Marketplace
Facebook Marketplace can be a convenient online platform if you want to sell your jewelry. With local and nationwide reach, it allows you to list your jewelry easily.
All you have to do is take some pictures of your jewelry from different angles and write a title with a quick description. You will also want to include the type of jewelry, the brand, condition, and mention any certificates or appraisals that it has.
Start by taking clear photos of your jewelry from different angles, and make sure to include close-up shots to highlight details and any craftsmanship.
Because Facebook Marketplace typically means that you will be meeting buyers in person, I highly recommend meeting in well-lit public places for local transactions or using secured payment and shipping methods for long-distance sales.
9. Local craft fairs or markets
If you have a lot of handmade jewelry to sell, then you may want to try setting up a stand at a local craft fair or market. These events give you a chance to present your handmade pieces to a community that appreciates more unique and artisanal items.
To find the right venue, research local fairs and markets that attract buyers interested in jewelry. Look for events that have a history of successful artisan sales. Remember, not all fairs are created equal, so pick ones that match your style and audience.
10. TheRealReal
If you have luxury jewelry you’re ready to part with, you can try selling through TheRealReal.
The RealReal is a high-end consignment online store that sells luxury items, such as designer clothing, shoes, and jewelry. You can earn up to 85% of the selling price for your items.
This marketplace specializes in consignment sales of high-end items. If brands like Chanel, Cartier, Van Cleef & Arpels, Tiffany & Co., and Rolex are in your collection, you’re in luck, as TheRealReal is known for these luxury names.
11. Sotheby’s
If you want to sell your valuable jewelry, Sotheby’s is a respected auction house known for selling fine art, jewels, watches, and wine. They are well-known globally, with offices in cities like Geneva, New York, Los Angeles, and Hong Kong.
Sotheby’s is known for handling the sale of expensive jewelry, and they have made headlines with the auction of the Royal Jewels from the Bourbon Parma Family, which fetched millions of dollars.
They have specialists who are experts who can help you understand the value of your jewelry and guide you through the consignment process. They’re always ready to view pieces in person, and you can schedule an appointment or ask about a visit.
12. Cash for Gold USA
Cash for Gold USA is a company that buys gold jewelry, such as gold necklaces. They also buy silver jewelry and diamond jewelry.
Cash for Gold USA gives out free appraisal kits, and these kits are the first step to figuring out how much your items are worth. It doesn’t matter if your jewelry is in excellent condition or a bit damaged; they are interested in buying a lot of gold and silver jewelry.
The mail-in system they have makes sure that you can send your gold without worry that it will be lost. They prioritize making it an easy and secure process for you. Here is what you need to do:
Request an appraisal kit or download the shipping form from their website.
Mail your gold or silver jewelry safely.
Wait for an offer.
Get paid.
If you decide to accept their offer, you will receive payment for your jewelry. Keep in mind that the current market price and the condition of your jewelry will affect the offer you get.
It’s important to note that Cash for Gold USA also buys other forms of gold, not just jewelry. They accept coins, watches, and even scrap gold. They claim to offer competitive prices and a 10% bonus on your quote when you obtain a certified appraisal from the Gemological Institute of America (GIA). This can potentially give you more cash compared to other competitors.
Tips for Selling Your Jewelry
Before you sell your jewelry, it’s important to know its value, make it look its best, and showcase it well with good photos. Skipping these steps might put you at a disadvantage when selling.
How to find out how much your jewelry is worth
Knowing how much your jewelry is worth is important because it affects where and how you sell it.
If your jewelry is valuable, you might get better offers at places like Sotheby’s auction house or specialized services for fine jewelry.
On the other hand, if your jewelry has a lower market value, then local options or online marketplaces could be faster and easier for selling.
To find out how much your jewelry is worth, try getting an appraisal from a certified professional. They look at things like quality, gold content, and whether there are diamonds or other precious metals to figure out the value.
You can find a good appraiser through groups like the American Gem Society.
Preparing jewelry for sale
After you find out the value, make sure your jewelry is ready to sell.
Cleaning is important; you could even think about professional services to make it shine, especially for valuable items like diamond pieces. Check if any repairs are needed, and keep records of the jewelry’s quality and materials.
These details will help convince potential buyers of its value.
Photographing your jewelry for listings
Take photos that show off the sparkle and details of your jewelry, making them really appealing to buyers.
Use a high-quality camera, and take pictures in natural light when you can get the most accurate representation of your jewelry.
If you’re selling online, make sure your pictures are sharp, clear, and show the true condition and quality of the piece.
Frequently Asked Questions
Below are answers to common questions about where to sell jewelry.
What is the best way to sell jewelry?
The best way to sell jewelry depends on what you have. If you have an engagement ring to sell, then I recommend trying to sell it on Worthy. If you need cash right away (such as the same day), then finding a local jewelry shop or a pawn shop near you may be good options. If you have a lot of cheap jewelry, such as costume jewelry, then Craigslist or Facebook may be good options.
Where can I get the most money for selling jewelry?
To get the most amount of money for your jewelry, think about selling your jewelry directly to consumers on online platforms. This skips the middleman and lets you set competitive prices.
How can I sell my jewelry without getting ripped off?
To avoid being ripped off, research the current market for similar jewelry, set a fair price, and always use secure payment methods and platforms with protections for sellers. If you’re selling high-value items, getting an appraisal from a certified gemologist or a trusted jeweler can also provide proof of your jewelry’s value.
Is it better to sell jewelry to a pawn shop or jewelry store?
Selling to a jewelry store might get you a better amount of money if the store is interested in the resale value of your pieces. However, pawn shops usually pay you faster. If you need quick cash and are willing to accept a potentially lower price, pawn shops can be an option.
Do local jewelers buy jewelry?
Many local jewelers buy jewelry, especially if it’s a piece they can resell or use for parts. It’s always a good idea to have a few consultations with different jewelers in your area to compare offers.
What is the best place to sell jewelry near me?
The best place to sell your jewelry near you depends on the type of jewelry you have. If it’s modern or in high demand, local jewelers or consignment shops might give you good prices. But if it’s unique or antique, you might get better results from specialized markets or online platforms that target specific audiences.
Best Places Where To Sell Jewelry – Summary
I hope you enjoyed this article on where to sell jewelry online and in person.
As you can see, there are many places to sell your jewelry. Whether you have sterling silver, an engagement ring, a diamond necklace, sapphires, rubies, or even historical or estate jewelry for sale, there are many jewelry buyers who may be interested in the jewelry pieces that you no longer want.
Have you sold jewelry before? Where is your favorite place to sell jewelry?
Average mortgage rates climbed moderately last Friday. Indeed, they rose on every business day last week. However, that followed a week of mainly falls. And those rates begin this morning close to where they were at the start of March.
First thing, it was looking as if mortgage rates today barely move. But that could change later in the day.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 30-year fixed
7.12%
7.13%
+0.02
Conventional 15-year fixed
6.62%
6.65%
+0.03
Conventional 20-year fixed
7.15%
7.17%
+0.04
Conventional 10-year fixed
6.64%
6.66%
Unchanged
30-year fixed FHA
6.49%
7.17%
+0.01
30-year fixed VA
6.61%
6.72%
+0.02
5/1 ARM Conventional
6.28%
7.38%
Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
I doubt we’ll see mortgage rates enter a consistent downward trend much before the summer, and possibly later.
So, for now, my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes held steady at 4.32%. (Neutral for mortgage rates. However, yields were rising this morning.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were rising this morning. (Bad for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices increased to $81.35 from $80.62 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices inched down to $2,159 from $2,162 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — nudged up to 75 from 71 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to hold close to steady. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
The Fed
The Federal Reserve’s rate-setting body (the Federal Open Market Committee or FOMC) begins a two-day meeting tomorrow. And a flurry of events is scheduled for the following afternoon.
Almost nobody expects an announcement of a cut in general interest rates on Wednesday. But events that afternoon include:
2 p.m. Eastern — Rate announcement and report publications
2 p.m. Eastern — Summary of Economic Projects publication. This occurs only quarterly and includes a dot plot
These FOMC documents and the news conference may provide new insights into how the Fed’s thinking on future cuts to general interest rates is evolving. So, markets globally will be paying the closest attention to every word written and uttered.
And there is huge potential for Wednesday’s Fed events to move mortgage rates.
I covered this in last Saturday’s weekend edition. And I’ll brief you in more detail again on Wednesday morning so you’ll know what to look out for.
Other influences on mortgage rates this week
Most of the economic reports on this week’s calendar are unlikely to affect mortgage rates. It’s not impossible. But they cover areas of the economy that rarely interest the bond investors who largely determine those rates.
Today’s lone report is a good example. It’s the home builder confidence index for February, which came in as expected. I don’t recall the last time that had a perceptible influence on mortgage rates. And the same goes for tomorrow’s housing starts and building permits, also for February.
The two reports that might move mortgage rates this week are both March purchasing managers’ indexes (PMIs) from S&P. One covers the services sector and the other manufacturing.
They’re both expected to show purchasing activity slowing modestly. But I’ll brief you more fully on what to expect on Wednesday.
Friday has no scheduled economic reports. However, three Fed speakers, including Chair Jerome Powell, have speaking engagements that day. Those could be an opportunity to reinforce messages communicated on Wednesday and to correct any misunderstandings. So, they could have an impact on mortgage rates.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Mar. 14 report put that same weekly average at 6.74% down from the previous week’s 6.88%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Feb. 12 and the MBA’s on Feb. 20.
Forecaster
Q1/24
Q2/24
Q3/24
Q4/24
Fannie Mae
6.5%
6.3%
6.1%
5.9%
MBA
6.9%
6.6%
6.3%
6.1%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Car incentives nearly vanished during the past several years, thanks to pandemic-driven supply chain issues for auto manufacturers. As vehicle inventories dwindled and consumer demand outweighed supply, automakers had no reason to offer incentives like rebates or low-rate financing. The good news is that auto incentives, while still below prepandemic levels, are starting to return.
According to Kelley Blue Book, a Cox Automotive company, auto incentives — as a percentage of the average new-vehicle price buyers paid — reached 5.9% in February 2024. That’s compared with a general range of 10% to 11% before COVID-19 hit and 2% in fall 2022. In February, auto manufacturers spent an average of $2,808 per vehicle in incentives, up 88% from a year ago.
With inventories returning to normal and some auto manufacturers again sweetening deals to move vehicles, here’s how you can find and possibly save with car incentives.
Tips for saving with auto incentives
Although new car prices have declined since peaking in late 2022, the average price a buyer pays remains around $47,000. Incentives are one way to whittle down that price tag, and certain strategies can help maximize savings.
Be flexible about the vehicle you buy
Traditionally, auto dealers strive to have 60 selling days’ worth of cars in stock. As auto production has returned, some manufacturers — like Toyota — remain well below the 60-day mark, while others — including Ford, Nissan and Buick — are overstocked and more likely to offer incentives and discounts to move cars.
“The key right now is to be flexible about which vehicle you consider,” says Sean Tucker, senior editor for data company Cox Automotive. “If you had your heart set on something from Toyota, you’re probably not going to find a great deal. They just don’t have trouble selling cars right now.”
Auto manufacturer websites are a good place to research auto deals and incentives — including cash rebates, low-rate financing and lease deals — that are available for various makes and models. Such incentives often vary regionally, so you can usually narrow a search by ZIP code. Also, auto research companies like Edmunds maintain webpages with current car deals and incentives by carmaker.
Tucker suggests that incentives for leasing and electric vehicles are both good sources for saving in the current market. Auto dealerships are trying to restore the leasing cycle that feeds the used car market, so many dealerships are offering lease deals.
“It’s actually relatively easy right now to get a good lease on an EV,” Tucker says. “And that might even be a good idea just from a technology standpoint, because three years from now, when your lease is likely coming up, there may be far better EVs on the market.”
Know what incentives you qualify for
To ensure you receive every incentive available to you, know exactly which incentives you qualify for before engaging with a car dealer. Joseph Yoon, consumer insights analyst at Edmunds, recommends telling the dealer upfront what you expect in the way of incentives.
“The dealer is not going to offer it to you unless they’re deeply desperate to get the deal done,” Yoon says.
As part of your research, be aware of the different types of incentives available, because in some cases they can be combined.
Auto rebates provide a certain dollar amount to reduce your overall cost of buying, financing or leasing a vehicle. The rebate reduction should be on top of any other discount you’ve negotiated.
Low-rate financing is an incentive offered by automaker captive lenders — although you’ll need to have good or excellent credit to qualify and may be limited on loan length. As of March 5, 2024, Cox Automotive reported that 14.2% of new vehicle financing transactions had an APR of 3% or less. Only 3.2% of transactions had a 0% APR. While low-rate offers are available, they aren’t plentiful.
Loyalty incentives may be available if you have a certain car brand and want to buy or lease another one from the same manufacturer.
Demographic-focused incentives — for example, if you’re a recent college graduate, military member or educator — are also offered by some auto manufacturers and dealers.
Stacking more than one incentive, when possible, can help you take advantage of every dollar available to you. If you have to choose between multiple incentives, for example, either a rebate or low rate from the same manufacturer, use an auto loan calculator to run each scenario and see which will save you the most money in the long run. Also, consider whether taking a cash rebate at the dealer and financing elsewhere could save you even more.
About EVs, Yoon says auto manufacturers and dealers are motivated right now to offer savings on top of the federal incentive, because “there’s still a little bit of inventory left from 2023 that they really, really, really want to get rid of as the 2024 models [are starting to] hit.”
Plan to negotiate and comparison shop
If you know you qualify for a $1,500 car rebate, don’t assume that’s the best you can do — even if the dealer tells you it is. The ability to negotiate car prices for some models has also reappeared, and incentives should be in addition to any amount you negotiate off the manufacturer’s suggested retail price. You can use valuation tools on car-buying sites to see what people are paying for the car you want and whether negotiating a lower price is realistic.
Finally, if you can find more than one dealership with the vehicle you want, present the deal you expect to each and let them compete for your business. Dealers receive factory-to-dealer discounts to help move certain vehicles, usually slower-selling ones. They can choose whether to pass these savings on to you and may be more motivated to do so if they know you’re shopping for the same car elsewhere.
Yoon says if a dealership isn’t willing to “play ball,” you shouldn’t hesitate to walk away. “Cars cost literally more than they have ever cost the consumer, and so you should, rightfully so, fight for every dollar that you can save.”