New Jersey Real Estate TipsReal Estate TipsReal Estates Sales November 14, 2014

Mortgage Rates Expected to Rise Slightly Going Into 2015

Mortgage rates expected to rise slightly going into 2015

While mortgage rates will reflect an individual’s credit history, income and current debt/income ratios, Freddie Mac predicts average mortgage rates will go from 4.3% to 5.0%. This is widely thought to be the result of an improving U.S. economy. Competition for borrowers and declining credit score requirements may continue to keep mortgage rates low for certain individuals with good credit but overall rates are expected to increase slightly in 2015.

Freddie Mac is a government mortgage brokerage. For many years the company has been taking weekly surveys related to home loans and refinance packages being offered around the United States. As of November 26, 2014 the average interest rate was 3.97%. The survey is based on 30 year fixed-rate mortgages. The same loan would have been at 4.71% at the same time in 2010.

What you can do to keep your mortgage rates low

While rates may go up and down there are a few things you can do to keep your rates as low as possible. Rates may vary based on location, the home you are purchasing and your credit history. Before buying or refinancing there are a few things you do to insure you get the lowest possible rate.

1. Understand the total cost of the loan including any fees or ‘points’.
2. Make sure you don’t have any errors on your credit report. These can usually be disputed easily online.
3. Keep your debt to income low. If you have some debt you can pay off then do so.
4. Remember that a few percentage points can make a big difference. It’s worth shopping around.