The Honest Broker: Mortgage rates are forecasted higher in 2021
As the country entered 2020, 30-year fixed-rate home loans were averaging 3.72%. Since then, mortgage rates hit historic lows more than a dozen times and ended last year at a breathtakingly low average of 2.67%, according to mortgage giant Freddie Mac.
A decline that huge can mean major savings on a loan as immense as a mortgage.
Thirty-year mortgage rates fell again in early January, to a record 2.65%, on average, though lately they’ve been creeping upward. However, some mortgage experts polled by The Mortgage Reports in October predicted 30-year rates would climb to an average 3.51% in 2021 under a new presidency.
Other forecasts look for only modest increases this year. Just last week, Freddie Mac predicted that 30-year fixed mortgage rates will average a mere 2.9% in 2021, and Fannie Mae — another government-sponsored mortgage company, like Freddie Mac — said rates would be averaging just 2.8% by the end of this year.
Even so, if rates do rise under the new president, borrowers will need to use a few not-so-secret methods to sniff out the cheapest mortgages possible. First, you’ll want to make sure your credit score is in tip-top shape, or you’ll never be offered a super-low rate.
Then, you must shop around to find the best mortgage rates, because they can vary from one lender to the next. Research from Freddie Mac has found borrowers can save thousands of dollars by comparing at least 5 quotes, instead saying yes to the very first offer.
If rates do start to take off, a homebuyer or refinancer might offset higher borrowing costs by saving money on homeowners’ insurance. With a little comparison shopping, you could potentially cut the annual price of your coverage by hundreds of dollars.
Bottom line is that if you have been contemplating a home purchase or a refinance, now is the time to do it and not wait for rates to rise.
Stay well and stay healthy
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
Sign up for alerts and daily digests- free all the time- www.treasurecoast.com