Home Buyers Too Stressed To Make Good Mortgage Choices
A study from Fannie Mae shows that buyers tend to make hasty, poor choices when they’re buying a home because they shop for homes and forget about their home loans; current mortgage rates and the 5-day trend in interest rates; and, how to refinance your mortgage without starting over at 30 years.
Buyers Showing Lack Of Focus, Fannie Mae Says
Home buyers spend so much time shopping for homes, a Fannie Mae study shows, that they forget to shop for a mortgage — until it’s almost too late.
The study, titled “Lack of Mortgage Focus Complicates Home Purchase”, examines how first-time home buyers shop for homes; and, how they choose their mortgage financing.
Fannie Mae followed buyers from the early stages of home buying as they searched for homes online and in person; through contract negotiations with real estate agents and sellers of homes; and, into the financing portion, including the selection of a mortgage loan and a mortgage lender.
Buyers described the home search process as “exciting” and “motivating.” By contrast, they described mortgages as “frustrating”, “intimidating”, and “overwhelming”.
Most were not mortgage-approved on their first attempt to buy. Poor budgeting and insufficient credit stymied more than half of those followed, ending in unsuccessful home purchase attempts.
Approved buyers faced trouble, too.
Many felt they lacked sufficient time to research mortgage options, and compare rates and mortgage loan fees between multiple mortgage lenders.
Fannie Mae’s conclusion: buyers who pre-qualify their mortgage early reduce stress, save money, and enjoy a higher level of satisfaction than buyers who neglect to address their mortgage soon.
If you plan to buy a home in the next 12 months, connect with a no-obligation mortgage lender today. Ask questions, learn about the process, and find your home eligibility today.
Today’s Mortgage Rates & Interest Rate Trends
Great news for home buyers who went into contract this past weekend, and for households ready to lock a mortgage rate.
Mortgage rates are improved today.
Rates are down for 30-year fixed rate mortgages, 15-year fixed rate mortgages, and most adjustable-rate mortgages (ARMs) including the 5-year ARM.
Interest rates for all loan types are improved.
- Conforming mortgages: Lower
- FHA mortgages: Lower
- VA mortgages: Lower
- USDA mortgages: Lower
- Jumbo mortgages: Lower
Talk to a lender and ask for today’s best mortgage rates. Your quote will vary based on more than a dozen factors including your loan size, your FICO score, and the state in which you live.
Your rate will also vary by lender, which is why it’s smart to comparison shop your loan.
Statistics show that shopping between two lenders saves borrowers $2,000 versus talking to just one; and talking to three lenders increases the savings by another thousand dollars or more.
Take time to shop around. Find your best combination of rates, fees, and service.
Get Free Mortgage Rate Quotes
Refinance Without Resetting Your 30-Year Mortgage
When mortgage rates drop, it’s great to do a refinance. A good refinance lowers your total mortgage costs and spikes your monthly cash flow.
But, the key to a refinance is what happens with the savings. And, one of the best uses of refinance savings is the early prepayment your new, refinanced loan.
Early prepayment can save your tens of thousands of dollars — enough to fund a retirement account, a college fund, or down payment account for a future vacation property.
Early prepayment works like this:
- Your refinance saves you $200 per month
- Each month, with your payment, you send that extra $200 also
- Your loan pays off years faster than if you never refinanced
Prepaying your mortgage to save money works because of math and how mortgage loans are structured.
In the early years, loans are front-loaded with interest; as much as 78 cents of every dollar paid can go to interest. Payment in the latter years, by contrast, is comprised mostly of principal, and this is where early prepayments get applied.
Every dollar extra you send to your lender comes off the last few years of your loan, and you can keep making those payments until there’s no loan left to prepay.
The more you reduce your mortgage rate, the faster your loan can pay off.
Anytime you refinance, it’s good to discuss zero-closing cost options with your lender so get a live rate quote today and see for what you’re eligible.
Saving a half-percentage point on your loan can save you $90,000.