When you’re ready to buy your first home, finding the right mortgage can be daunting whether you’re a first-time homebuyer just starting to build equity in your career or an experienced investor who’s looking to upgrade your portfolio, there are several factors you should consider before applying for a mortgage.
With mortgage rates continuing to rise and becoming more competitive with other investment options, now may be the best time to purchase a home at the same time, it’s important to know when is the wrong time to apply for a mortgage and how that could affect your long-term financial goals.
Follow this discussion of mortgage rates today and its implications on whether now is a good time or not to apply for a mortgage, and we hope you’ll agree with our conclusions!
The Best Time to Apply for a Mortgage?
The ideal time to apply for a mortgage will vary based on a number of factors, but in general, the earlier you start the process, the better chance you’ll have at obtaining the best possible rate.
Assuming there is enough time before you need to close on your new home, the best time to apply is between October and April, this is in part due to the fact that these are the months when mortgage rates are lowest but is also a time when the market is at its calmest, allowing for more accurate estimates of the purchase price and rate.
For first-time buyers, the best time to apply for a mortgage is in October, November, and December, as rates are typically lowest during these months, as the year progresses, mortgage rates tend to rise, with April being the month that is most expensive.
April is definitely a time to consider applying for a mortgage but understand that the best rate you can expect is in the lower end of the range and, if you’re looking to purchase a new home, January, February, and March are the least favorable months to apply for a mortgage, as rates remain higher than in any other three-month period.
When Is it Time to Look into Rates?
If you’re currently shopping for mortgages rate today, now is not the best time to start applying for a mortgage, while mortgage rates have been steadily rising since late 2017, they are still extremely competitive with other investment options, such as stocks and bonds.
For example, a 30-year, fixed mortgage rate of 4.31% is the lowest available rate in 2018 and is still competitive with the best interest rate on a 12-month CD, which is currently at just 0.5%. If you are shopping around for the right mortgage rate, now would be a good time to do so and you could potentially save a little bit of money.
That, however, is only if you get approved for a mortgage, which is no easy feat, getting a mortgage is certainly not easy and it can be a long and complicated process. If you’re looking to refinance, now is a good time to do so because rates are still low, but you should proceed with caution.
Mortgage Rates Today: Why Are They So High?
While mortgage rates are on the rise due to increased competition in the market, it’s important to remember that these rates have been extremely low for quite some time. The Federal Reserve’s decision to begin winding down its bond-buying program, known as quantitative easing, inflated the housing market in 2017 and resulted in record-low mortgage rates.