Interest rates have been at their lowest levels in more than a year and a half for quite some time now, but with the U.S. Federal Reserve expected to raise short-term borrowing rates as early as June, this could push mortgage rates back up in the coming months. For the meantime, interest rates are still well below 4 percent for 30-year fixed-rate mortgages in most surveys, with the national average currently at 3.75 percent. Last year, that average rate was at 4.28 percent.
Keeping that number and a possible Fed rate hike in mind, it stands to reason that there couldn’t be a better time for consumers to stop sitting the fence and start shopping for a new home and the lowest rates possible.
According to Bankrate chief financial analyst Greg McBride, rate hikes can definitely affect affordability, but it’s not the only thing one should consider. “You don’t buy a house because of low interest rates any more than you get married because of a sale at the bridal shop,” he said.
So what can you, as a consumer, do if you’re looking for the lowest interest rates possible? For one, it would be a good idea to take a long, hard look at your credit score. Ideally, a FICO score of 740 or higher would qualify you for the lowest possible rates, but we have to admit that that’s not exactly the easiest score to achieve. Chances are you’ll be paying a higher mortgage rate if your credit score is lower than 740, but if it is below that threshold, it’s a good idea to review your credit report for errors, as you get a free credit report every 12 months from major “credit bureaus” Equifax, Experian, and TransUnion.
It is also advisable to do a lot of comparison shopping, and to get all your quotes on the same day, so as to allow you to accurately compare rates side-by-side. Remember that mortgage rates tend to fluctuate on a daily basis.
Also, you should also keep in mind the fees you may have to pay, and also, if possible, try to leverage a reduction in fees and never forget the Good Faith Estimate; when comparing offers, you want more than one of those estimates for a better idea of each lender’s terms and conditions.
In order to search for live mortgage rate quotes from some of the top U.S. lenders, please click on the link below. To calculate your monthly mortgage payment, feel free to use our featured mortgage calculator.