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Is It Too Late to Get a Good Mortgage Rate?

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Freddie Mac released the results of its Primary Mortgage Market Survey this week, which indicated that average fixed mortgage rates have declined slightly in the wake of the sharp increase after the Federal Reserve’s announcement that it will slow its bond-buying program in the near future.

Average interest rates on a 30-year fixed mortgage have dropped to an average of 4.37 percent from last week’s 4.51 percent. Fifteen-year home loans also fell from 3.53 percent to an average of 3.41 percent this week. Though experts in the field are saying that rates may still continue to rise, albeit at a steadier pace than the initial spike.

Mortgage loan officer and Credit.com contributor Scott Sheldon offered some insight into qualifying for a mortgage. “Rates are improving now,” he said. “Are we ever going to see rates at 3 and a half percent again? Probably not. Looking ahead to October or September, we might see rates hit 4.75, maybe 5 by the end of the year.”

What’s Ahead for Mortgage Rates

Testifying in front of Congress, Bernanke emphasized that the bond purchases are still contingent on economic developments, saying that “they are by no means on a preset course.”

Though Sheldon added that rates will surely rise if and when the 2014 planned easing of bond-buying happens, there are options for those looking to buy a home now.

“What I’m doing now is I’m qualifying people at a half a percent higher rate. That way, most of the time they still qualify, and if we can do it lower, everyone’s happy,” he explained. His advice to those looking to purchase a home: “Try to qualify at least a half or .625 percent higher than you normally would.”

Particularly for first-time homebuyers, Sheldon recommends that they “lock their loan in immediately, or pick a rate they can get to by investing an upfront overhead. But they don’t want to get into their contract wondering what their loan is going to be.”

According to Sheldon, “if rates are going to dip again, they’re going to do it now,” but he also mentioned a trend during the past three years: massive interest rate improvements twice at the beginning and end of August. “So if they’re going to get into a contract in the next 30 to 40 days, it might be a good idea to wait, but if not, I’m going to say they should lock in their rate now,” he said.

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