Mortgage Rate – Sznurki Mon, 17 Jan 2022 18:40:25 +0000 en-US hourly 1 Mortgage Rate – Sznurki 32 32 3 Reasons Why You Should Refinance Your Mortgage Now Mon, 17 Jan 2022 16:18:00 +0000

If you’re a real estate investor, you know how important it is to maintain decent cash flow. It is therefore often advantageous to mortgage the properties in your portfolio rather than buying them outright, even if the latter is an option.

If you have at least one mortgage now, you might want to consider refinancing it sooner rather than later. Here’s why.

Image source: Getty Images.

1. Prices are already climbing

Refinance rates, which tend to be a bit higher than the rates you’ll see available for purchase mortgages, are already starting the year higher than they were in 2021. At the time of as of this writing, the average 30-year refinance rate is close to 3.7%

Historically speaking, this remains a competitive rate. But if rates continue to climb, refinancing will no longer have the same appeal, so you might want to grab this opportunity sooner rather than later.

The Federal Reserve has previously indicated that it plans to raise rates in the coming year. And while the Fed doesn’t set mortgage rates, it influences them. There’s a good chance the average 30-year refinance rate will hit over 4% during 2022, so it pays to get in now, when rates are lower and savings opportunities are greater. abundant.

2. Your property taxes could go up

Real estate investors and homeowners should prepare for higher property taxes this year. This is because home values ​​have increased across the board, and these taxes and market value tend to go hand in hand.

A mortgage refinance could help offset a property tax hike if the savings are substantial enough. And while you may be inclined to raise rents to help offset a higher property tax bill, whether that strategy actually works for you is another story. If you implement too drastic a rent hike, you may find it difficult to retain your existing tenants or find a replacement.

3. You can leverage the equity in your property and build your portfolio

In the third quarter of 2021, American homeowners were sitting on a collective net worth of $9.4 trillion, according to Black Knight. And now is a good time to consider doing a cash refinance.

Since refinance rates are always competitive, a property you own is a good source of cash to exploit. You can use this money to add to your real estate portfolio, renovate an existing property you own to justify a large rent increase, or invest elsewhere, such as loading onto REITs (real estate investment trusts).

Consider refinancing early in the year

Many homeowners were spoiled for record mortgage rates throughout the latter part of 2020 and 2021, so today’s rate offers might read as a pretty unattractive deal. But historically speaking, rates are still very competitive, so it’s definitely not a bad time to consider refinancing.

But if you’re going to go this route, hurry. It’s easy to argue right now that today’s refinance rates are low enough to be attractive, but if they rise steadily, that might cease to be the case.

The demand for refinancing plunges by 50% from one year to the next. These are some of the reasons why Sat, 15 Jan 2022 17:00:30 +0000

Image source: Getty Images

Borrowers may forgo refinancing for good reason.

Key points

  • Refinancing requests are down 50% compared to the same period a year ago.
  • Higher mortgage rates, economic uncertainty and a previous refinancing boom could explain this statistic.

Refinancing a mortgage is a great way to save money monthly. By lowering the interest rate on your home loan, you can lower your housing costs and free up money for other things. And given that inflation makes day-to-day living costs much more expensive, it’s a smart thing to consider.

But these days, the demand for refinancing is not so high. The Mortgage Bankers Association reports that for the week ending Jan. 7, refinance demand was 50% lower than a year earlier. And while different factors can contribute to this trend, here are some likely causes.

1. Fares are higher

On a historical basis, mortgage rates are currently at competitive levels. But they are already higher than last year, and that may scare off borrowers. This especially applies to those who already have relatively low rates on their existing loans.

As a general rule, your refinancing goal should be to reduce the interest rate on your loan by about 1 percentage point or more. The reason for this is that you will pay closing costs to exchange an existing home loan for a new one, so you will need to save enough to make these costs worth it. But the higher the refinancing rates go, the less attractive they will be.

2. Borrowers’ plans may be on hold

Because you have to pay closing costs to refinance, it’s important to stay in your home long enough to get out of it financially. Suppose you are charged $4,000 closing costs for a new mortgage, which reduces your monthly payments by $200. While that’s a nice amount of money to save, it will take 20 months to break even after paying your closing costs. If you’re not sure you’ll stay in your home that long, then refinancing becomes a risk.

Although the US economy is quite strong, we are currently in a generally precarious position due to inflation and the omicron surge. Many borrowers may be in a position where they don’t rush to refinance because their plans just aren’t as firm.

3. Many people have already refinanced

When mortgage rates started plunging in the middle of 2020, many people rushed to refinance. This recent drop in demand is also explained by the fact that many borrowers have already obtained new mortgages since the start of the pandemic, and therefore do not need to repeat this process.

Should I refinance?

If you haven’t refinanced your mortgage yet, going this route might be a good idea. But before you do, ask yourself:

  • How is my credit score? If it’s not in great condition, you may not qualify for a competitive mortgage rate on a new loan.
  • Do I already have a low mortgage rate? If so, the savings you realize from refinancing may be minimal or non-existent when you factor in closing costs.
  • Do I stand still for a moment? If you are unsure, you should probably delay refinancing.

Refinancing could be a great way to save money on housing costs, and even though rates today are higher than they’ve been recently, they’re still relatively low. It is important to ensure that getting a new mortgage is the right decision considering the above factors.

A Historic Opportunity to Save Potentially Thousands of Dollars on Your Mortgage

Chances are interest rates won’t stay at multi-decade lows much longer. That’s why it’s crucial to act today, whether you want to refinance and lower your mortgage payments or are ready to pull the trigger on buying a new home.

Ascent’s in-house mortgage expert recommends this company find a low rate – and in fact, he’s used them himself to refi (twice!). Click here to learn more and see your rate. While this does not influence our product opinions, we do receive compensation from partners whose offers appear here. We are by your side, always. See The Ascent’s full announcer disclosure here.

Mortgage rates at their highest since March 2020 Thu, 13 Jan 2022 20:09:00 +0000 The 30-year fixed-rate mortgage averaged 3.45% in the week ending Jan. 13, compared to an average of 3.22% the previous week, according to Freddie Mac. This is the highest average rate since March 2020, when it reached 3.5%.

“Mortgage rates have risen across all types of mortgages, with the 30-year fixed rate mortgage up nearly a quarter of a percent from last week,” said Sam Khater, chief economist by Freddie Mac. “The rise in mortgage rates so far this year has yet to affect buying demand, but given the rapid pace of house price growth, it will likely dampen demand in the near future.”

Another reason rates are rising is that, overall, the economy is improving, said George Ratiu, head of economic research at

“The slight impact of the Omicron wave, despite the high number of cases, points to a brighter post-pandemic horizon, a sentiment that underpins a more optimistic outlook for the economy,” Ratiu said.

But rising mortgage rates, along with near-record inventory and rising home prices could push some buyers out of the market.

At the current rate, buyers of a median-priced home are paying about $219 more per month than they were a year ago, adding more than $2,600 to their annual housing costs, Ratiu said.

“With prices for most consumer goods and services rising, shoppers are feeling the pinch on their wallets,” Ratiu said. “Affordability continues to be a central challenge for first-time buyers this year.”

There are also indications that some homebuyers have started shopping earlier than the typical spring buying season, Ratiu said.

Last week, mortgage applications rose slightly from the previous week, according to the Mortgage Bankers Association. Because there are so many people looking to buy a home, Joel Kan, associate vice president of economic and industry forecasting at MBA, said he expects the number of new mortgage applications remains high.

Applications for government-backed loans — an attractive option for first-time home buyers and those with less money for a down payment or lower credit scores — have also increased, he said. said, with applications for Federal Housing Administration (FHA) loans and VA loans on the rise.

“The housing market started 2022 on a high note,” Kan said. “MBA expects solid growth in buying activity this year as demographic drivers and a strong economy support housing demand. However, the strength of growth will depend on faster growth in housing inventory to meet demand.

Mortgage rate hike on January 12, 2022: what does it mean for buyers? Wed, 12 Jan 2022 14:00:00 +0000

Jim Lane / Getty

A few major mortgage rates have gone up today. Average interest rates for 15-year and 30-year fixed mortgages have both tended to increase. We have also seen an inflation in the average rate of adjustable rate 5/1 mortgages. Although mortgage rates fluctuate, they are at an all-time low. For this reason, now is the perfect time for potential buyers to secure a fixed rate. But as always, be sure to consider your personal goals and circumstances first before buying a home, and look for a lender who can best meet your needs.

30-year fixed rate mortgages

The average interest rate for a standard 30-year fixed mortgage is 3.52%, which is an 18 basis point increase from a week ago. (One basis point equals 0.01%.) Thirty-year fixed rate mortgages are the most common loan term. A 30 year fixed rate mortgage will usually have a lower monthly payment than a 15 year mortgage, but usually a higher interest rate. You won’t be able to pay off your home that quickly, and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to keep your monthly payment down.

15-year fixed rate mortgages

The average rate for a 15-year fixed-rate mortgage is 2.84%, which is an increase of 22 basis points from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and the same interest rate will have a higher monthly payment. However, as long as you are able to afford the monthly payments, a 15-year loan has several advantages. These typically include the ability to get a lower interest rate, pay off your mortgage sooner, and pay less total interest over the long term.

5/1 adjustable rate mortgages

A 5/1 variable rate mortgage has an average rate of 3.54%, an addition of 19 basis points from a week ago. With an ARM mortgage, you will typically get a lower interest rate than a 30-year fixed mortgage for the first five years. But changes in the market can cause your interest rate to increase after this period, as stated in your loan terms. For borrowers who are considering selling or refinancing their home before rates change, an adjustable rate mortgage may be a good option. Otherwise, market fluctuations could dramatically increase your interest rate.

Mortgage rate trends

We use data collected by Bankrate, which is owned by the same parent company as CNET, to track rate changes over time. This table summarizes the average rates offered by lenders nationwide:

Current average mortgage interest rates

Type of loan Interest rate A week ago Change
30-year fixed rate 3.52% 3.34% +0.18
15-year fixed rate 2.84% 2.62% +0.22
Giant 30-year mortgage rate 2.73% 2.75% -0.02
30-year mortgage refinancing rate 3.54% 3.35% +0.19

Updated January 12, 2022.

How To Shop For The Best Mortgage Rate

You can get a personalized mortgage rate by connecting with your local mortgage broker or by using an online calculator. Make sure you think about your current finances and your goals when trying to find a mortgage. Things that affect the mortgage interest rate you might get include: your credit rating, down payment, loan-to-value ratio, and debt-to-income ratio. Typically, you want a higher credit score, higher down payment, lower DTI, and lower LTV to get a lower interest rate. Beyond the mortgage rate, factors such as closing costs, fees, points of call, and taxes can also be factored into the cost of your home. Be sure to talk to multiple lenders – including local and state banks, credit unions, and online lenders – and a comparator to find the best mortgage for you.

How does the term of the loan affect my mortgage?

When choosing a mortgage, remember to consider the length of the loan or the repayment schedule. The most commonly offered mortgage terms are 15 years and 30 years, although you can also find 10, 20 and 40 year mortgages. Mortgages are divided into fixed rate and variable rate mortgages. For fixed rate mortgages, the interest rates are the same throughout the life of the loan. Unlike a fixed rate mortgage, the interest rates on a variable rate mortgage are only stable for a certain period of time (most often five, seven, or 10 years). After that, the rate fluctuates annually based on the market rate.

When choosing between a fixed rate mortgage and an adjustable rate mortgage, you need to consider how long you plan to live in your home. If you plan to live in a new home for the long term, then fixed rate mortgages may be the best option. While variable rate mortgages may offer lower interest rates initially, fixed rate mortgages are more stable over the long term. If you don’t plan on keeping your new home for more than three to ten years, an adjustable rate mortgage might give you a better deal. The best loan term depends entirely on the individual’s circumstances and goals, so be sure to consider what’s important to you when choosing a mortgage.

Pre-market stocks: why homebuilder stocks just plunged Mon, 10 Jan 2022 13:33:00 +0000 But this is not the only sector to take a hit.

What’s happening: The actions of U.S. home builders, including Toll brothers (TOL), Lennar (LEN) and Pulte Group (MPS) were among the biggest losers on Friday. The iShares US Home Construction exchange-traded fund fell 4.5% and ended the week down 9%.
The shares of these companies soared in 2021 as the US real estate market took off. Average house prices saw their biggest increases on record thanks to limited inventories and easy access to cheap loans, which helped fuel demand.
A year ago, the 30-year fixed mortgage rate stood at 2.65%, the lowest on record. Stories of crazy offers and discouraged first-time buyers have become commonplace. Even Wall Street investors rushed in a rush.

“It’s been a crazy year,” Matt Holm, a Compass agent in Austin, Texas, recently told my CNN Business colleague Anna Bahney.

He recalled a smaller five-year-old house he put on the market last January for $ 425,000, already higher than listings for comparable properties. The interest was immense.

“I stopped counting at 35 offers,” he said. The house sold for $ 545,000, a 30% increase from the list price.

Shares of Toll Brothers rose nearly 67% in 2021, compared to a 27% jump in the S&P 500. Lennar gained 52% and PulteGroup climbed 33%.

But the prospect of rising interest rates, which serves as a crucial benchmark for mortgage loans, is shaking things up.

The Federal Reserve has indicated that the era of low rates will end soon given the need to fight inflation and signs that the economy is returning to normal. Employment data released on Friday confirmed expectations on this front.

See here: US employers created 199,000 jobs in December, a lower reading than economists had expected. Still, the unemployment rate fell to 3.9%. That’s very close to the all-time low of 3.5% reached in February 2020. Wages also rose 0.6% as companies scrambled to attract workers, which could fuel higher prices.

“With an unemployment rate below 4% and increasing wage pressure, the Fed seems ready to react quickly,” James Knightley, ING’s chief international economist, told clients.

In a note released Sunday night, Goldman Sachs said it now expects the Fed to hike interest rates four times this year starting in March. He had previously entered three increases in pencil.

Mortgage rates have already started to climb, with US bond yields rising as investors brace for action. The 30-year fixed mortgage rate was on average 3.22% for the week ending January 6, the highest level since May 2020. It’s still low by pre-pandemic standards, but could start to bring down some of the heat of the housing market.

This could be good news for potential buyers who have been left behind by affordability concerns, but lead to a weaker year for companies like Toll Brothers and Lennar who have been riding the wave.

Could Big Oil Taxes Rise Along With Energy Costs?

Should governments raise taxes on businesses like Shell (RDSA) and PA (PA) as energy prices soar this winter?

This is a question the UK government is under increasing pressure to answer as UK households face skyrocketing bills, reports my CNN Business colleague Charles Riley.

The main opposition Labor Party this weekend called on Prime Minister Boris Johnson to impose a one-off tax on companies pumping oil and gas from the North Sea, saying the money raised could be used to reduce by 200 £ ($ 272) soaring household bills.

The party has reportedly said the corporate tax rate that businesses pay should be increased by 10 percentage points for a year. It would also allow the government to increase energy subsidies for the poorest households.

The big picture: UK consumers will pay around $ 1,075 more to heat and light their homes this year, according to Bank of America, following a dramatic spike in wholesale energy prices that sparked the collapse of dozens of UK energy suppliers in recent months.

Wholesale gas prices in Europe jumped 400% from the previous year and electricity prices rose 300%, according to Bank of America. The increases are due to the cold, the shutdowns of nuclear power plants in France and the reduction in gas flows from Russia.

BP and Shell both operate in the North Sea and have benefited from rising gas and oil prices. BP CEO Bernard Looney told the Financial Times in November that soaring commodity prices had turned the company into a “cash machine”. The company posted profits of $ 3.3 billion in the third quarter of 2021 and said it plans to return an additional $ 1.25 billion to its shareholders.

The rebuttal: Industry group OGUK, which represents UK offshore producers including Shell and BP, said last week that a one-off tax would make energy companies less likely to invest in the country, causing “irreparable damage to the country. industry “that” would leave consumers even more exposed to global shortages.

Why Nike and Ralph Lauren are getting harder to find

Looking to buy Nike (NKE) sneakers, Adidas (ADDDF) Crocs sweatshirts, clogs, polo shirts or Canada Goose parkas?

These days you are probably more likely to catch them in their own stores or on their websites than in the smaller chains.

Break it down: Big brands are reducing the number of outside retailers selling their products, reports my CNN Business colleague Nathaniel Meyersohn.

Instead, they focus their efforts on getting customers to buy directly from their own channels as well as a select group of wholesale partners.

The strategy: Selling directly to customers allows brands to make more money, control their prices, and present products exactly the way they want in in-store displays. They can also prevent their labels from being discounted too heavily, which could weaken their branding and pricing power.

But the change means shoppers will have fewer places to purchase some of their favorite products. It also puts pressure on retailers who will no longer be able to stock much sought after shoes and clothing.

Under Armor and Ralph Lauren have stopped sending merchandise to discount stores like TJ Maxx, while Nike stops new shipments to the DSW shoe warehouse.


Tilray (TLRY) publishes its profits before the US markets open.

Coming Up: All eyes are on the latest US consumer price data, due Wednesday.

Down 67% from peak, Rocket mortgage stock is not a good deal Sat, 08 Jan 2022 15:45:13 +0000

Back in March, I argued that Rocket Mortgage – a Detroit-based mortgage maker and seller – was undervalued.

Since then, the stock has lost 67% of its value. On March 2, when I wrote that 39.7% of its stock had been sold short, Rocket’s stock jumped to $ 43. By January 7, its shares had fallen to around $ 14.20.

I don’t know why the stock climbed last March – but it could have been a short squeeze. I think a lot of those who bet against the action have since taken their profits. The most recent report – Dec. 15 – notes that short-term interest rates were 10.3% of its float – up 7.1% from the previous month, according to the Wall Street Journal.

Is the stock even more undervalued now or should we bet it will go down? I would avoid the stock at current levels.

Back in March, I cited its above-expectation growth, special dividend, and below-target price as reasons why the stock would rise.

I also highlighted the risk of rising mortgage rates – which fell from 2.65% (30-year fixed rate) in January 2021 to 3.22% this month, according to CNN – as a possible shock absorber on its action.

With mortgage rates set to rise, the best hope for Rocket Bulls is that they can grow much faster than investors expect. But those higher mortgage rates will make that very difficult.

(I have no financial interest in the titles mentioned).

Rocket’s disappointing third quarter report

Rocket – a provider of personal finance and consumer technology brands including Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, Rock Central, Amrock, Core Digital Media, Rock Connections, Lendesk and Edison Financial – has become the market leader in US mortgage market, according to the Wall Street Journal.

During the pandemic, he grew very quickly. As the Journal reports, Rocket “doubled his mortgages in 2020 and increased them by another third until last fall. It is now the largest mortgage lender in the country, making almost as many home loans as Wells Fargo & Co.

and JPMorgan Chase & Co.


Unfortunately for investors, Rocket’s revenue and profits declined significantly in the third quarter of 2021. According to Inman, its revenue fell 32% to $ 3.11 billion while net profit fell 53% to 1, $ 39 billion.

The problem Rocket faces is its reliance on its more profitable refinancing business, which has suffered from rising interest rates and falling demand and margins.

While Rocket Mortgage’s closed loan origination volume edged down to around $ 88 billion, less profitable purchase loans made up a larger portion of its assets and cost Rocket considerable profitability – its margin gain. sales drop from 4.52% to 3.05%, Inman noted.

Rocket was thrilled with the results. As Jay Farner, Vice President and CEO of Rocket Companies, said in a statement, “We had an excellent third quarter … Our core mortgage lending business exceeded the forecast high for volume. of closed loans and profit margin on sale, while achieving record buying volume.

Rocket declined to provide revenue and profit guidance for the fourth quarter – instead, he sets lending volume targets. As CFO Julie Booth told investors on November 4: “[We expect] our closed loan origination volume for the full year of 2021 will exceed $ 350 billion, exceeding by more than 10% the previous record of $ 320 billion reached in 2020. “

How rising mortgage rates will reduce demand

When mortgage interest rates rise, the demand for mortgages and mortgage refinancing decreases. This could hurt Rocket’s income and profits, unless it can generate enough business from other services that aren’t so dependent on falling mortgage rates.

Experts predict a rate hike due to higher inflation, promising economic growth and a tight labor market. Lawrence Yun, chief economist of the National Association of Realtors, expects the 30-year fixed mortgage rate to end at 3.7% in 2022 while Jacob Channel, LendingTree’s

senior economic analyst, forecasts rates of nearly 4%, according to CNN.

The demand for purchase mortgages and refinances is down and is expected to decline. Joel Kan, associate vice president of economic and industrial forecasting at MBA, said that “the demand for refinancing continues to decline as many borrowers refinanced in 2020 and early 2021, when mortgage rates were approximately lower. 40 basis points, “CNN noted.

With strong favorable winds – the softer Omicron variant and a resilient economy – George Ratiu, director of economic research at, said: “I expect the upward momentum in Treasury rates to continue. to drive up mortgage rates.

Demand for mortgage refinancing will plunge. As the Journal writes, “Refinancing is expected to drop by nearly two-thirds across the industry” in 2022.

Could Rocket grow faster than investors expect?

Rocket is trying to diversify its revenue streams to grow faster than these negative trends suggest.

Rocket – who derives “almost all of his income from mortgages” – has been more aggressive than his peers in trying to grow beyond refinancing. Here are three examples:

  • Rocket Homes, a Zillow

    a similar ads platform to connect it to potential home buyers was launched in 2018;
  • Rocket Autos connects car buyers with dealerships; and
  • Truebill, a personal finance startup for bill splitting and subscription cancellation, was acquired by Rocket last month, the Journal wrote.

If you’re worried about Rocket’s future trajectory, you need to assess whether Dan Gilbert is the right source of vision. Gilbert, who founded the company in 1985, is now president of Rocket – and with his wife controls 79% of the voting rights in Rocket shares. He also owns the Cleveland Cavaliers.

Rocket – which presents itself as a fintech – hopes to be valued as such. The Journal noted that Rocket claimed to have 153 million visitors to its platform in 2010, 61% more than in 2019.

Rocket aspires to transform his visitors to Rocket Homes and the 2.5 million he expects to add through his Truebill purchase to become Rocket customers when they buy a home, according to the Journal.

Analysts are not hitting the drums to buy Rocket stock. According to CNN Business, 17 analysts who cover the company have a “pending” rating. And “14 analysts offering 12-month price forecasts for Rocket Companies have a median target of $ 17.25”, or about 22% above its current price.

Just because Rocket stocks are 67% below their peak doesn’t mean they’re cheap. With rates on the rise, I don’t see any tangible catalysts for revenue growth in 2022.

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Unemployment claims in the United States increase by 7,000; Rising mortgage rates in the United States Thu, 06 Jan 2022 22:00:49 +0000

The number of Americans claiming unemployment benefits rose last week but remained at historically low levels, suggesting the job market remains strong.

Unemployment claims in the United States rose by 7,000 last week to 207,000. The four-week claims average, which dampens week-over-week gyrations, rose nearly 4,800 to reach just under 205,000. Despite the increases, figures show weekly claims are lower than the typical 220,000 before the pandemic hits the US economy in March 2020.

The highly transferable variant of the omicron does not appear to have triggered any significant layoffs so far.

In total, nearly 1.8 million Americans were on traditional unemployment assistance during the week ending December 25.

“Assuming omicron-related layoffs are limited amid a tight labor market, we would expect initial claims to continue to hover around the (200,000) mark,” said Nancy Vanden Houten, economist chief at Oxford Economics.

Rising mortgage rates in the United States

Average long-term mortgage rates in the United States have risen over the past week to start the new year. They reached their highest level since May 2020, at the height of the coronavirus pandemic, while remaining historically low.

Mortgage buyer Freddie Mac reported Thursday that the 30-year average benchmark home loan rate rose to 3.22% this week from 3.11% last week. A year ago, the 30-year rate stood at 2.65%.

The average rate on 15-year fixed-rate mortgages, popular among those refinancing their homes, fell to 2.43% from 2.33% last week.

Many economists expect mortgage rates to rise this year after the Federal Reserve announced last month that it would start cutting its monthly bond purchases to contain inflation. But even with the three rate hikes expected in 2022, the Fed’s benchmark rate would remain below 1%.

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Mortgage Payment Calculator – Tue, 04 Jan 2022 20:27:39 +0000

Use Money’s mortgage calculator to estimate your monthly payments based on the price of the house, current mortgage rates, and the type of loan.

You can also use our calculator to estimate how much you’ll pay based on your credit score and how much you’ve saved for a down payment. Enter your information, see the results, and find out how many homes you can afford.

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Money Mortgage Calculator

Mortgage Calculator Guide

Our mortgage calculator allows homebuyers to see how different inputs – purchase price, credit score, interest rate, and down payment amount – affect their total payment to help determine how much real estate they have. can comfortably afford.

When looking for a new home, keep in mind that mortgage rates change daily and vary from lender to lender. So use this loan calculator to get a rough estimate and then make sure you get quotes from multiple lenders. (We recommend one of Money’s Best Mortgage Lenders of the Year.)

Once you start actively looking for a home, make sure you get pre-approved so you can act quickly once you’ve found a home you want to bid on. Your starting mortgage balance will be the price you pay for the house less your down payment.

How to calculate your mortgage payment

Three main factors determine your monthly mortgage payment: the loan amount, the interest rate, and the length of the loan. Your credit score and the location of your home will also affect your interest rate and, in turn, the amount you pay.

Additional expenses such as Homeowners Association (HOA) fees, closing costs, property taxes, and homeowners insurance should be factored into your monthly housing expenses.

Formula to calculate your monthly mortgage payments

While our calculator relieves you of computing, the geniuses of mathematics can do it on their own with the following formula:

M = P *[(i/12*(1+i/12)n)]/[(1+i/12)n-1]

M – your monthly mortgage payment

P – the principal amount of the loan

I – the monthly interest rate, which must be divided by twelve (corresponding to the months of the year) since lenders give an annual rate

m – the number of payments over the term of the loan (number of years), or the amortization schedule. For example, for a 30-year mortgage, n would be 360 ​​payments, (12 payments per year over 30 years, or 12 * 30).

What factors affect your mortgage payments


Putting 20% ​​down payment allows you to avoid paying for private mortgage insurance (PMI). Greater equity also gives you more term finance options, but the average down payment is around 6%, and it is possible to get a home loan with as little as 3% down payment. .

With our calculator, you can enter the part of the cost of the house that you expect to pay upfront as a percentage or as a dollar value.

Interest rate

Interest on a mortgage is calculated monthly and is part of your annual percentage rate, or APR, which also includes the fees you have to pay the bank to borrow money. Interest rates have remained at historically low levels since 2020, when the state’s Federal Reserve decided to lower interest rates in response to the coronavirus pandemic.

Our calculator automatically fills in an average mortgage rate based on the information you enter, but you can override it to see how rate changes might impact your costs.

Postal code

Your location can affect your mortgage rate.

Type of loan

The most common mortgage loan is a conventional 30-year fixed-rate loan or a fixed-rate mortgage, but some people opt for 15-year loans to pay off debt faster or a variable rate mortgage to secure a mortgage. lower rate. In most countries, if your mortgage is over $ 510,400, you will need to take out a jumbo loan.

Credit score

An estimate of the health of your credit. Credit scores range from Average (580-669) to Good (670-739), Very Good (740-799), and Excellent (800 and above). Anything below 580 is considered bad credit.

How to reduce your monthly mortgage payments

Having trouble paying your mortgage? There are many reasons why you might need to lower your monthly mortgage payments. Perhaps you were too ambitious in purchasing your home, have other important financial goals, or you are in a deteriorating financial situation.

Whatever the reason, here are a few methods to reduce your payments and save space in your budget.

Get rid of PMI

Private mortgage insurance, also known as PMI, is a type of insurance policy that protects lenders against borrowers who default on their mortgage. For conventional loans, a borrower’s down payment must exceed 20% of the price of the house to avoid PMI – government-guaranteed mortgages, such as a VA or FHA loan, are exempt (if you are considering a VA loan, check out Money’s best VA lenders of the year).

Borrowers can call their lending institution to ask them to cancel the PMI after reaching 20% ​​of their home equity. This can be achieved by making regular additional payments or by lump sum payment on mortgage capital to reach that 20% sooner. You can also try to reduce the PMI by reassessing or redeveloping your home.


Refinancing your home loan is replacing an existing home loan by taking out a new one from your current lender or from another lender. This loan may have a better total interest rate and new terms that better match your financial goals.

There are two main methods of reducing your monthly refinancing payments. The first is to take advantage of lower interest rates, which can be done now, since rates are at historic lows. The second is to extend the term of the loan, thereby lengthening your payments, but at the risk of ending up with more debt for longer.

Buy mortgage points

Mortgage points could be an attractive solution to potentially high mortgage payments, as they can only be “bought” before taking out a home loan. When you buy mortgage points, you are essentially paying the lender to lower your interest rate, which will lower your monthly mortgage payments over the life of the loan.

Buying Purchase Points is not the right option for everyone, but it is worth considering if you intend to hold the property for a long time.

Sell ​​and buy a more affordable home

Refinancing may not be enough to reduce your monthly mortgage payment to an acceptable number. If the weight of your mortgage is just too much to bear, consider selling your home and buying a more affordable one instead.

Keep in mind that this option should be reserved for the worst case scenario where your inability to make payments could put you at risk of defaulting on your loan. You will need to invest time, money, and energy in the process of selling your current home, buying another, and then moving into your new home.

There has never been a better time to buy a home.

Mortgage experts can help you do this. Click below and request your free quote today.

To start

Find out how much home you can afford

Understanding the limits of your budget is crucial before committing to a lending institution. This will help you stay realistic and avoid a risky purchase, even if it is your dream home, which could backfire on you in the future.

To find out how much home you can afford, you’ll need to enter your down payment, your condition, your credit rating, and the type of home loan you prefer.

You will also need to state either your desired monthly payment amount or your gross monthly income and monthly debts. The latter two are used to determine your debt-to-income ratio, which plays an important role in your ability to borrow in the first place.

Most lenders and calculators rate affordability with the 28/36 rule, which states that your housing expenses and total debt should not exceed 28% and 36% of your total income before tax, respectively. To calculate this, multiply your monthly income by 28 or 36, then divide it by 100.

For example, with a monthly income of $ 4,500, you shouldn’t be spending more than $ 1,260 on monthly housing costs. The formula to calculate this would be x = (a × 28) ÷ 100, where a is your monthly income (1260 = [4,500 × 28] 100).

Mortgage Calculator FAQs

How Much Mortgage Can I Afford?

How much you can afford to pay for a home will mostly depend on your household monthly income, monthly debts (credit cards, student loans), and the amount of available savings for a down payment. Your debt-to-income ratio (DTI) will also affect affordability. The higher your DTI, the harder it will be to get a mortgage.

What is a good down payment for a house?

A good down payment is whatever you can afford without breaking the bank or dipping too deep into your savings. The best down payment for a house is 20% since this lowers your monthly mortgage payments and allows you to purchase a home without paying for private mortgage insurance.

How to pay off my mortgage faster

The simplest way to pay off your mortgage faster is by making larger or more frequent payments towards your loan principal. For example, you could make biweekly payments or one extra lump sum payment per year.
You can also refinance to a shorter-term mortgage, which will raise your monthly payments in exchange for a home loan that you can pay off faster.

How to reduce my mortgage payment

Buying a less expensive home will mean lower monthly payments. Putting more money down upfront also reduces the amount you need to borrow. Finally, longer loan terms will reduce your monthly payment (though you will ultimately pay more interest over 30 years than 15).
A better rate also means a lower monthly payment, so if you're not in a rush, do what you can to increase your credit score.

How much should my deposit be?

In general, lenders require a minimum down payment of at least 3% of the home price. To avoid paying private mortgage insurance premiums -- which protect the lender, not the homeowner -- borrowers usually need to put 20% down.
The average homeowner pays a down payment of between 3% and 7%.

What is the best loan term for my mortgage?

More than 90% of mortgages are 30-year conventional loans. Still, you may find that a fixed-rate 15-year mortgage term suits you best because you'll pay less interest over the life of the loan -- though you will have higher monthly payments.

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Boiling housing market fuels record mortgages Sat, 01 Jan 2022 10:30:00 +0000 Americans are borrowing more homes than ever before in 2021.

Mortgage lenders issued $ 1.61 trillion in purchase loans in 2021, according to estimates by the Mortgage Bankers Association. This is a slight increase from $ 1.48 trillion in 2020 and above the previous high of $ 1.51 trillion in 2005.

The mortgage boom reflects a booming housing market and the corresponding rise in prices over the past year. Many of the forces that pushed Americans into the housing market during the first months of the pandemic – low interest rates and a desire for bigger homes – continue to drive up prices and mortgage balances. In addition, many Americans got raises and racked up savings during the pandemic, empowering them to buy.

“All of that extra income is going somewhere, and a lot of it has been spent on housing,” said Taylor Marr, deputy chief economist at Redfin Corp., a real estate brokerage firm.

The rate of home price growth has slowed in recent months, but remains near record levels. Home prices rose 19.1% in the year ended in October. Sales of existing homes in 2021 are expected to reach their highest level since 2006.

A strong job market and wage increases across a range of industries have prompted some potential buyers to enter the housing market. Wages of all workers in the private sector rose 4.6% year-over-year in the third quarter, according to the Bureau of Labor Statistics.

The US mortgage market involves some key players who play an important role in the process. Here’s what investors need to understand and what risks they take when investing in the industry. WSJ’s Telis Demos explains. Photo: Getty Images / Martin Barraud

“Buying a home is really a statement of confidence in your job, your financial situation, your family situation,” said Mike Fratantoni, chief economist at the MBA.

Neel Kumar started looking for accommodation this summer after accepting a new job with a substantial pay rise. He found one in a community of homes under construction about 30 miles from his hometown of Austin, Texas. Without the increase, Mr. Kumar said he would not have been able to pay for the $ 405,000 house.

Young buyers like Mr. Kumar, 27, have helped boost the housing market in recent years. According to CoreLogic, Millennials, born in the early ’80s to mid’ 90s, submitted 67% of all first mortgage applications in the first eight months of 2021.

Mr. Kumar obtained the keys to his house at the end of December.

“It was a pretty crazy feeling,” he said. “Like, damn it, this is actually happening. “

Growth in purchase mortgages partially offset a decline in refinancing, which fell to about $ 2.3 trillion in 2021, from $ 2.6 trillion a year earlier. Total creations have fallen to about $ 3.9 trillion from their record high of $ 4.1 trillion in 2020.

Rising mortgage rates have slowed the wave of refinancing that has driven the mortgage boom since the spring of 2020. When rates rise, fewer homeowners can reduce their monthly payments by refinancing. The Federal Reserve is expected to hike rates three times in 2022, pushing mortgage rates even higher.

About 59% of the $ 3.9 trillion in mortgages issued in 2021 were refinancings, up from 64% in 2020. The share of refinancings is expected to fall to 27% by 2023, and the volume is expected to fall by about 63% in 2020. 2022.

Economists don’t expect rate hikes to discourage potential homebuyers. The average rate for a 30-year fixed-rate mortgage still hovers around 3%, a low level by historical standards.

Yet soaring home prices have overtaken rising incomes and low interest rates, making homeownership beyond the reach of many Americans.

Mortgages are less affordable relative to income than at any time since 2008, according to the Federal Reserve Bank of Atlanta. At the start of 2021, Americans needed about 29% of their income to cover a mortgage payment on a median-priced home, the Atlanta Fed estimated. This figure rose to 33% in October.

Write to Orla McCaffrey at

Copyright © 2021 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Mortgage rate forecasts for January 2022 Sat, 01 Jan 2022 05:10:15 +0000

The page for another calendar year has turned and now is the time of year when we traditionally make resolutions to get in shape, eat healthier, or spend more time with friends and family.

One more thing to add to your list: stop delaying and refinance your mortgage. This is because rates are expected to rise from their all-time lows over the coming month and beyond. Where will the rates on the 30-year fixed-rate benchmark mortgage and its 15-year cousin land in January? Our experts intervene below.

Time goes down as mortgage rates rise

It was a whirlwind end to 2021, from pandemic to finance. Last month, the Fed suggested that several rate hikes were slated for 2022 to fight rising inflation. He signaled that starting this month, he would reduce his monthly purchases of Treasury securities and monthly mortgage-backed securities by $ 20 billion and $ 10 billion, respectively.

Coronavirus numbers continued to climb alarmingly amid reports of the spread of the omicron variant and lower than expected vaccination booster rates. And the Biden administration’s Build Back Better legislation suffered a potentially fatal setback.

All of these factors, and more, suggest a higher rate climate at the start of 2022.

“High inflation and the Fed’s gradual acceleration will push mortgage rates up in January. I expect the 30-year fixed mortgage rate to average 3.2% and the 15-year fixed mortgage rate to average 2.5% this month, ”said Nadia Evangelou, Senior Economist and director of forecasting for the National Association of Realtors.

Inflation recently hit its highest level since 1982, and history shows that rising inflation pushes up the 10-year Treasury yield.

“Higher inflation erodes the return an investor on a bond or loan holds over time, and bonds are no longer attractive to investors. This, in turn, lowers the value of bonds and increases yields, ”Evangelou said. “As a result, mortgage rates go up because they are tied to the yield on the 10-year Treasury.”

Additionally, the Fed reducing its purchases of bonds and mortgage-backed securities means that consumer mortgages currently sold to Fannie Mae and Freddie Mac will have to find other buyers – a strategy that will also contribute to a rise. mortgage rates.

Greg McBride, chief financial analyst at Bankrate, does not foresee any significant changes in mortgage rates. “With inflation high, mortgage rates could drift a bit higher in January,” says McBride, adding that he expects 30-year and 15-year rates to climb to 3.5% and 2.7%, respectively, on average this month.

Rick Sharga, executive vice president of RealtyTrac, on the other hand, doesn’t think mortgage rates will rise much more than their average in December.

“This is because market conditions are not expected to change significantly over the next 30 days. Thus, the rates for the 30-year fixed-rate loan will probably be around 3.1%, compared to 2.3% for the 15-year fixed-rate loan, ”explains Sharga.

First Quarter Mortgage Rate Forecast

Fannie Mae expects the 30-year benchmark fixed rate to be between 3.1% and 3.2% in the first quarter of 2022, while the Mortgage Bankers Association expects 3.3% to 4% and Freddie Mac between 3.4% and 3.5%.

“An upward trend in rates will likely continue for much of the first quarter of 2022, with a 30-year average rate between 3.25% and 3.5% and 15-year rates in the neighborhood of 2 , 5% to 2.8%, ”McBride said. “If there is a significant improvement in the supply chain and expectations of lower inflation, however, this could limit mortgage rates. But a wild card is the growing number of COVID cases. “

Evangelou expects the 30-year rate to average 3.3% versus 2.6% for the 15-year rate in the first three months of the year. “Mortgage rates will rise in the first quarter as the Fed will likely end its purchases of mortgage-backed securities by March. This means that the current economic stimulus policies will soon come to an end. In addition to doubling the pace of its decline, three rate hikes will follow later in 2022, likely starting in the middle of the year. “

Sharga envisions an average rate of 3.25% over 30 years by the middle of the year, reaching 3.5% by the end of the year. “A number of factors suggest rate hikes, including higher inflation and the Federal Reserve’s plans to accelerate the cut while increasing the federal funds rate two or three times over the coming year. While there is no direct correlation between the Fed Funds rate and mortgage rates, these Fed actions tend to set the tone for the overall credit environment. “

Nonetheless, global events – especially those influenced by the pandemic – could cause international investors to flight to the relative safety of U.S. Treasuries, driving down yields and preventing mortgage rates from rising.

“And if rising mortgage rates lead to lower home purchases, lenders could try to keep rates lower in order to boost lending volume,” Sharga said. “I still think it’s more likely that we will see a modest increase in mortgage rates during 2022, but as we’ve seen in recent years anything can happen.”

New year, new opportunities

The moral of the story? Lock in a low rate on a purchase or refi loan now if you feel financially secure.

“If you think you are financially prepared to own a home, you should probably move out ASAP. Home prices have risen 18-20% over the past year and are expected to continue rising in 2022, albeit at a slower pace, ”Sharga said. “Combined with even a modest hike in interest rates, this can make it difficult for buyers – especially first-time buyers – to be able to afford a home.”

Evangelou subscribes to this theory. “I see no reason not to buy or refinance at this time. Mortgage rates will continue to rise, ”she said.

However, don’t feel like you have to do something prematurely.

“If you find yourself reaching the limit of what you can afford, put up an offer without being seen or after only five minutes of visiting, or if you are forced to forgo a home inspection, you’d better to go away, ”says McBride. “There are worse things than staying where you are or renting for a year or two until you can buy in a more balanced and healthy market where you can do the necessary due diligence.”

Also zoom out from micro view to macro view for necessary context.

“Mortgage rates have reached or are approaching their historic lows in recent years. And even with a modest increase over the coming year, these rates will continue to be good deals, ”adds Sharga. “Borrowers should keep in mind that interest rates between 3 and 3.5% are also lower than the current inflation rate of 5.5%, which in itself is a powerful argument for buying a home. or get refinancing if you can afford it. “

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