Mortgage rates have dropped, and here are more ways to save on a mortgage now

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The latest mortgage rates

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Mortgage rates on 30-year fixed-rate mortgages have fallen slightly and are back below 6%. Indeed, the national average for 30-year fixed-rate mortgages now stands at 5.90%, while the national average for 15-year fixed-rate mortgages is 5.1%, according to Bankrate data. published on June 30. adjustable rate mortgages (rates are fixed for five years and then adjust) are 4.29%. (See the lowest mortgage rates you can get now here).

Admittedly, we are far from the ultra-low rates seen a year ago. But the pros say there are ways to save. If you can afford a 15-year mortgage, the rates are lower. Adjustable rate mortgages (ARMs) are also worth considering, but only if they’re right for you. This is because starting rates on ARMs are significantly lower than 15-year and 30-year fixed rate mortgages, although ARM rates are variable and can increase. ARMs tend to make more sense for short-term homeowners who only plan to stay in the same home for 5-7 years. But as ARM rates become variable, “ARMs can be risky, and in the long run they may end up costing more than a fixed mortgage with a higher initial rate,” economic analyst Jacob Channel said recently. principal of LendingTree, at MarketWatch Picks.

No matter what type of loan you get, experts recommend getting quotes from 3-5 lenders and determining your credit score (improve it if necessary) and your debt-to-equity ratio (DTI), which can help you determine what rate you can expect to pay. To calculate your DTI, divide your monthly debt payments (mortgage, credit card payments, car, student or personal loans, child support) by your gross monthly income. If the number you come out with is 36% or less, your chances of qualifying for a mortgage, and at a better rate, are better than if you come out with a higher number like DTI. See the lowest mortgage rates you can get now here.

If you’re still looking for ways to lower an interest rate, consider buying cashback points, which are fees paid up front to lower an interest rate – one point usually lowers the interest rate 0.25%, although this may vary. “When you pay cashback points, you give the lender a portion of the interest payments up front in exchange for paying less interest each month,” Holden Lewis, real estate and mortgage expert at Nerdwallet, recently told MarketWatch Picks. But note that there may be limits to the number of discount points you can buy, and buying points may not make sense, especially if you don’t plan on staying in the house for long.

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