Anyone looking to buy a home probably shudders every time they see mortgage rates tick higher. Unfortunately, things are likely even worse than they appear.
The mortgage rates that you see quoted in the news — which in mid-September climbed to more than 6% for a 30-year loan — can sometimes be a best-case scenario. As The Wall Street Journal reports, many borrowers are likely to pay an even higher rate on their own mortgage.
The newspaper notes that a widely quoted survey from Freddie Mac — the government-sponsored mortgage-loan company — gathers numbers in a way that cannot quite capture fast movements in the mortgage market.
As an example, the WSJ notes that many borrowers have been encountering mortgage rates of 6% or more as far back as June.
Todd Hanley, a Boca Raton, Florida-based loan partner at CrossCountry Mortgage LLC, tells the WSJ:
“If you have a really volatile rate — and mortgage-rate volatility is historically high right now — by the time the survey comes out it can be grossly inaccurate.”
Even when you see a mortgage rate advertised on a lender’s website, you probably should take it with a grain of salt. Quicken Loans notes that buyers might get a different mortgage rate than what they see on the website for several reasons, including:
- The type of transaction you are engaging in
- The loan amount
- Your credit score
- The size of your down payment
- The amount of equity you have in your home
- The property type
So, don’t expect that you will pay the rates you hear about. But don’t panic, either.
Instead, take matters into your own hands by shopping around and comparing rates. That is the best way to ensure you get the lowest rate possible for your situation.
If you are looking for a mortgage, stop by our Solutions Center and compare mortgage rates.