Mortgage Charges Immediately, August 7, & Fee Forecast For Subsequent Week
Today’s mortgage and refinancing rates
Average mortgage rates rose yesterday. And after three consecutive business days of rising, they’re back to levels last seen on July 20th. That’s based on Mortgage News Daily (MND) data for 30-year fixed-rate mortgages (FRMs).
Mortgage rates could rise further next week. But that is far from certain. Read on to find out why we’ve got to a point where no one knows.
Find a cheap rate and block it (August 7, 2021)
Current mortgage and refinancing rates
|program||Mortgage rates||Effective interest rate*||change|
|Conventionally fixed for 30 years||2,773%||2,773%||+ 0.03%|
|Conventionally fixed for 15 years||1.99%||1.99%||Unchanged|
|Conventional 20 years old||2.49%||2.49%||+ 0.12%|
|Conventionally fixed for 10 years||1,851%||1,883%||+ 0.01%|
|30 years permanent FHA||2,688%||3,343%||+ 0.11%|
|15 years fixed FTA||2.4%||3,001%||+ 0.03%|
|5/1 ARM FHA||2.5%||3,207%||Unchanged|
|30 years of permanent VA||2,327%||2,499%||+ 0.08%|
|15 years fixed VA||2.133%||2,453%||+ 0.02%|
|Prices are provided by our partner network and may not reflect the market. Your rate can be different. Click here for an individual price offer. View our rate assumptions here.|
Find a cheap rate and block it (August 7, 2021)
COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To learn how the coronavirus could affect your home loan, click here.
Should You Lock A Mortgage Rate Today?
If I had a tariff to lock in, I would do that now. Average mortgage rates remain exceptionally low, with most borrowers still getting an interest rate that starts with a 2. But the landscape has changed a lot since last week.
Yes, the markets are still operating in mystifying ways. And it’s entirely possible that we’ll see more falls soon. Because of this, I’ve left my rate lock recommendations at Float so that those who have to wait longer before having to lock up have to be. But the risks involved are higher than they were a week ago. And cautious people may want to lock now regardless of their close date.
For now, I’ve only made a small change to my personal recommendations. But they might reappear in a red sea soon if things don’t get better.
- LOCK when close in 7th Days
- LOCK when close in fifteen Days
- LOCK when close in 30th Days
- HOVER when close in 45 Days
- HOVER when close in 60 Days
With so much uncertainty right now, however, your instincts could turn out to be as good as mine – or better. So let yourself be guided by your gut instinct and your personal willingness to take risks.
What is moving the current mortgage rates
We’re at one of those points where nobody knows. True, when it comes to mortgage interest, it often does.
But we are currently facing two similarly likely scenarios:
- Mortgage rates are returning to their downtrend as the decline this week was due to one-off events
- These rates continue to rise because this week’s events are turning points that have fundamentally changed investor sentiment
These events certainly have the potential to change everything.
The more important thing happened yesterday and was the publication of the monthly employment report. These reports have been disappointing lately. And that fuels concerns that the economic recovery may be patchy and unsustainable. But yesterday’s data far exceeded expectations.
Are one month’s numbers enough to convince investors that the rebound is as strong as most other data suggests? We’ll have a better idea as next week unfolds.
The other major event was a speech by Federal Reserve Vice Chairman Richard H. Clarida. In it he signaled that the Fed is trying to reduce its bond purchases earlier than previously proposed.
Regular readers know all about tapering. But in a nutshell, the Fed is currently buying mortgage-backed securities (MBSs, a type of bond that actually determines mortgage rates) at the rate of $ 40 billion a month. That keeps mortgage rates artificially low. So if the Fed begins to “shorten” (gradually reduce) these purchases, these rates are likely to rise, possibly sharply.
So far, the markets have acted as if this would not happen until well into next year. However, it is becoming more and more likely that a date will be announced for 2021. And maybe soon. Earlier this week, Federal Reserve Governor Christopher Waller told CNBC:
I think you might be ready to make an announcement by September. That depends on what the next two job reports do. If they’re as strong as the last one then I think you’ve made the progress you need. If not then I think you will probably have to put things off for a couple of months.
– Bloomberg, “Fed’s Waller Says September Taper Call Could Be Justified,” August 2, 2021
That’s what Mr. Waller said on the Monday before yesterday’s big job report. And if enough investors believe him and Mr. Clarida, mortgage rates could rise steadily.
Of course, investors have been proving for several months that they can more than shake off any information they do not want to hear. So here we are at a different point where no one knows.
Economic reports next week
If this week was all about employment, the next one will be all about inflation. By far the most important report is likely to be Wednesday’s consumer price index for July. But there are a few others, including the July producer price index (Thursday) and the import price index (Friday).
None of the other economic reports listed below are likely to cause much movement in the markets unless they include shockingly good or bad data. Additionally, regular readers know that investors have ignored most of the economic reports in the past few months. Therefore, the effects of the following may differ from the usual ones:
- Monday – June vacancies
- Tuesday – Productivity and Unit Labor Costs for the Second Quarter (Preliminary Figures)
- Wednesday – July Consumer Price Index (CPI) and Core CPI, which is the CPI excluding volatile energy and food prices
- Thursday – July producer price index. Plus weekly new unemployment insurance claims until August 7th
- Friday – July import price index. Plus the first reading of the August consumer sentiment index
Wednesday is the big day.
Find a cheap rate and block it (August 7, 2021)
Mortgage rates forecast for next week
I have said repeatedly that at one point we are “nobody knows”. But if I had to guess, I would say Mortgage rates could go higher this week.
Mortgage and refinancing rates usually move in parallel. And a gap that had grown between the two was largely closed with the recent abolition of the disadvantageous market refinancing fee.
This is how your mortgage rate is determined
Mortgage and refinance rates are generally determined by prices on a secondary market (similar to the stock or bond markets) that trade mortgage-backed securities.
And that depends heavily on the economy. So mortgage rates are typically high when things are going well and low when the economy is in trouble.
But you play huge roles in determining your own mortgage rate in five ways. You can significantly influence it by:
- Find your best mortgage rate – they vary widely from lender to lender
- Boost Your Credit Score – Even a small increase can make a big difference to your rate and payments
- Save the Biggest Down Payment possible – lenders like you to have real skin in this game
- Keep Your Other Borrowings Modest – The lower your other monthly obligations, the higher the mortgage you can afford
- Choose Your Mortgage Carefully – Are You Better Off With a Conventional, FHA, VA, USDA, Jumbo, or Other Loan?
The time you spend getting these ducks in a row can result in you winning lower prizes.
Remember, it’s not just a mortgage rate
Make sure to count all of the upcoming home costs when figuring out how much a mortgage you can afford. So concentrate on your “PITI” This is yours P.rincipal (pays back the amount borrowed), IInterest (the price of borrowing), (property) TAxles and (homeowners) IInsurance. Our mortgage calculator will help you with this.
Depending on your type of mortgage and the amount of your down payment, you may also need to pay for mortgage insurance. And that can easily reach three digits every month.
But there are other potential costs as well. So you have to pay community contributions if you choose to live with an HOA. And wherever you live, you have to expect repair and maintenance costs. There is no landlord to call if something goes wrong!
Eventually, you will find it hard to forget about closing costs. You can see this in the specified annual percentage rate (APR). Because this effectively spreads it out over the life of your loan and makes it higher than your pure mortgage rate.
However, you may be able to get help with these closing costs and your down payment, especially if you are a first-time buyer. Read:
Down payment assistance programs in each state for 2021
Mortgage rate methodology
The mortgage report receives interest rates from several credit partners on a daily basis according to selected criteria. We’ll find an average interest rate and an APR for each type of loan shown on our chart. Since we average a range of prices, this will give you a better idea of what you might find in the market. In addition, we determine average interest rates for the same types of credit. For example FHA fixed with FHA fixed. The result is a good snapshot of the daily rates and how they change over time.