Posted
on Monday, April 18, 2022
in
Mortgage Lending
Ways to Counter Rising Mortgage Rates
Due to uncertainty in the financial market, it's difficult to predict exactly where mortgage rates are headed this year. Experts point to a few culprits for the surge in rates in March and April - inflation, the Federal Reserve's move to start raising its short-term interest rate, and the effects on the financial markets related to the war in Ukraine.
Despite the market's volatility, there are three steps homebuyers can take to offset higher mortgage interest rates?
- Reduce your loan term. Typically, the mortgage rate for a 15-year fixed loan is lower than the rate for a 30-year fixed loan. On April 18, 2022, the difference between a 15- and 30-year fixed mortgage loan through First National Bank was 0.625%.
- Make a larger down payment. Increasing the down payment lowers the amount borrowed and your monthly payment. Borrowing $190,000 instead of $200,000 at 4.875 percent will lower your monthly payment by $52.92 over the life of a 30 year-fixed loan. ($1,005.50 per month for principle and interest versus $1,058.42 per month). Use First National Bank's Loan Calculator to estimate your loan payment.
- Lock in your interest rate. Locking your interest rate in early at the beginning of the borrowing process assures you that the rate won’t rise before your loan closes. Homebuyers who are prequalified for a loan through First National Bank will have their interest rate locked for 60 days at no charge while they are searching for that perfect home.
First National Bank offers very competitive financing options. Speak to one of our experienced lenders to learn more about prequalification and how to lock in your interest rate.
- home buying
- interest rates
- mortgage loan