After nearly a full year of record lows, mortgage rates seem to be back on the rise, and with a steady climb at that. This past week, mortgage rates were the highest they had been since this past July. AH!
According to the latest data released by Freddie Mac, the weekly U.S. average for a 30-yr. fixed rate mortgage as of March 11, 2021 stands at 3.05%.
How come you ask? I’d like to say that there’s some economic positivity coming our way – the workforce is getting back out there, vaccines are continuing to make their way through the population, and there’s another round of stimulus payments getting dumped into the population. Win on a lot of fronts, but not necessarily for the current home buyer when it comes to their mortgage rate – the rate they could possibly be stuck with for the next 30 years.
What’s this mean if you’re a home buyer? GET MOVING, SALLY. Spend time looking, NOW. Find your new home and put your offer on the table. Get your rate locked in before rates continue their steady climb.
What’s on the legal front? Let’s chat about a mortgage rate lock and what that means. Protecting against rising rates and market fluctuations, a mortgage lender may provide a rate lock guarantee assuring you’re able to receive a certain mortgage rate so long as you use said mortgage company and your closing happens before a specified date. With a forecasted steady climb in mortgage rates, this is definitely something that can be leveraged to your benefit. But what if it isn’t? What if rates unexpectedly fall to 2.5% again after you’ve locked your rate in at 3.05%? Can you back out? In simple form, YUP. It’s great to know that the only party bound to the agreement is the lender or broker. How exactly do you go about breaking the rate lock you ask? Easy – simply don’t proceed with the application or loan officer – go elsewhere! Do keep in mind that switching lenders after a certain point in the closing process can be detrimental – but if it’s early on and rates unexpectedly lower, I say GO FOR IT.