Mortgage rates continued climbing with HSH Associates reporting average combined rates for 30-year fixed rate (FRM) loans moving from 4.95 to 5.18 percent. Mortgage rates for a 15 year FRM rose from 4.33 to 4.54 percent, a hike of 21 basis points. Rates for a 5/1 adjustable rate mortgage (ARM) moved from 3.73 to 3.88 percent. Compared to minor upward ticks in recent weeks, these rate changes are a wake-up call that the party is over long before New Year's eve arrives.
Mortgage rates: Focus on APR instead of interest rates alone
Mortgage lenders advertise their lowest interest rates, which are available to customers with flawless credit. For the rest of us, mortgage rates are higher, and may include paying points to lock in the rate quoted for a specific period of time. One point is equal to one percent of the mortgage amount you're borrowing. It's important to keep in mind that in addition to mortgage interest and points, you'll also pay lender fees and closing costs.
The annual percentage rate (APR) shown on mortgage quotes represents the estimated cost of a mortgage loan including most fees and costs (typically including some of the closing costs) along with mortgage interest.
Mortgage quotes are only estimates--here's why
In addition to changing mortgage rates, your credit scores and down payment can impact your actual mortgage rate. Lender fees and costs can also vary. Closing costs can change between the time your mortgage lender issues a good faith estimate and closing. Here are some factors impacting closing costs:
- Home repairs. Home inspections can uncover needed repairs: although sellers typically cover these by adjusting the sale price or issuing a buyer credit, buyers may also pick up some repair costs.
- Title problems. Title and escrow costs may increase if there are title issues that must be resolved prior to transferring title from sellers to buyers.
- Recurring costs. Mortgage lenders require a "pad" of two months payment for property taxes, hazard insurance, and mortgage insurance (if applicable). Initial estimates may differ from actual costs.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.
