Should you lock in your mortgage rate today or wait? If you’re looking to buy a home, deciding whether to lock in your mortgage rate today or wait depends on various factors. You’ll have to consider the current market conditions, your personal risk tolerance, and your financial situation.
In this post, our real estate experts at Your Home Sold Guaranteed Realty - Nancy Kowalik Group will discuss five considerations you should think about before deciding to lock in your mortgage rate. We’ll also share what mortgage rates have been like in New Jersey recently.
Key Takeaways:
- The interest rate for a 30-year loan in New Jersey is 6.863%. The rate for a 20-year loan is 6.689%.
- According to several real estate and mortgage experts, interest rates are expected to fall by the end of 2024 and continue declining going into 2025.
- Consider your long-term financial goals and how the current mortgage rates will impact your plans. If you’re comfortable with the current rate and it falls within your budget, locking it in can provide stability and peace of mind.
Should You Lock in Your Mortgage Rate Today or Wait?
In recent months, the current interest rates in New Jersey were:
Fixed Rate Mortgages:
- 30-year Loan: 6.863%
- 20-year Loan: 6.689%
- 15-year Loan: 6.017%
- 10-year Loan: 5.499%
Adjustable Rate Mortgages:
- 7-year Loan: 6.779%
- 5-year Loan: 7.028%
Special Loans:
- 30-year Fixed-Rate Federal Housing Administration Loan: 5.767%
- 30-year Fixed-Rate Veterans Affairs Loan: 5.914%
So if you’re planning to buy a house in Mullica Hill, should you lock in these mortgage rates now or wait? It’s impossible to know whether mortgage rates will continue to rise or start to fall, and if they do, when that could be.
According to several real estate and mortgage experts, interest rates are expected to fall by the end of 2024 and continue declining going into 2025. The National Realtor Association predicts that mortgage rates will decrease to 6.1% by the end of 2024.
Meanwhile, Fannie Mae predicts mortgage rates will decrease to 6.4% by the end of the year and 6.2% by 2025.
Of course, these predictions could change depending on inflation, unemployment, and other economic factors. For this reason, it’s best to consult with a mortgage lender about whether you should lock in your mortgage rate now or wait.
5 Considerations Before Locking In Your Mortgage Rate
Market Trends
Before you start looking at homes for sale, check the economic conditions in your local area. Review data on inflation rates and unemployment reports, monitor current mortgage rate trends, and check announcements from the Federal Reserve. All of these economic factors influence interest rates and can help you gauge whether rates will rise, fall, or remain stable.
Buying Timeline
If you don’t have much flexibility for when you need to buy or refinance your home, then a rate lock may be a good idea to protect you against future rate increases. This may especially be a good idea if you have an established closing date you have to stick to. However, if you do have flexibility and believe rates may decrease in the future, it could be a good idea to wait and lock in your rate later.
Rate Lock Period
Lenders offer certain terms regarding rate locks. Make sure to review the rate lock agreement and understand all the terms, particularly the duration of the lock period. Typically, rate locks are available for 30 to 60 days, but longer lock periods may be available for a fee. Choose a lock period that aligns with your expected closing timeline.
Financial Goals
Consider your long-term financial goals and how the current mortgage rates will impact your plans. If you’re comfortable with the current rate and it falls within your budget, locking it in can provide stability and peace of mind.
Risk Tolerance
While waiting to lock in your rate may offer the potential for lower rates, it also carries the risk of rates increasing. Evaluate whether you’re willing to accept this risk or prefer the certainty of a locked rate.
Learn More About Locking in Your Mortgage Rate
Ultimately, it’s important to consult a professional mortgage lender or financial advisor about locking in your mortgage rate. They can provide insights into market dynamics, rate projections, and the potential impact on your financial goals.
At Your Home Sold Guaranteed Realty - Nancy Kowalik Group, Nancy Kowalik and our real estate team have years of experience working with home buyers in Mullica Hill and South Jersey. We can help you connect to the top lenders and financial advisors in the area so you can make an informed decision that helps you achieve your homeownership goals.
Give us a call at (856) 478-6562 to learn more or check out our current listings and inventory. You can also use the form below. Don’t have to wait to make your real estate dreams come true!
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