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Mortgage rates have inched down since yesterday. The average 30-year mortgage rate is still near 7%, but other loan terms have more appealing interest rates.Review your loan options if you are ready to buy a house now. If you still want a 30-year term but the current rate is too high, consider an adjustable-rate mortgage (ARM). ARM rates usually start lower than fixed rates, and rates could be even lower in a few years when your intro-rate period ends.Learn more: Best mortgage lenders for first-time buyersToday’s mortgage ratesHere are the current mortgage rates, according to our latest Zillow data:30-year fixed: 6.84%20-year fixed: 6.47%15-year fixed: 6.14%5/1 ARM: 6.65%7/1 ARM: 6.69%30-year FHA: 6.15%15-year FHA: 6.57%30-year VA: 6.04%15-year VA: 5.71%5/1 VA: 6.24%Remember that these are the national averages and rounded to the nearest hundredth.Almost all mortgage rates have ticked down since yesterday. The average 30-year rate is down three basis points. The 15-year VA loan experienced the most drastic drop of 22 basis points, down from yesterday’s 5.93%. If you qualify for a VA loan, it can be a great option for locking in a relatively low rate with no down payment.30-year fixed mortgage rates: Pros and consThere are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable.A 30-year fixed-rate mortgage has relatively low monthly payments because you’re spreading your repayment out over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike with an adjustable-rate mortgage (ARM), your rate isn’t going to change from year to year. Most years, the only things that might affect your monthly payment are any changes to your homeowners insurance or property taxes.The main disadvantage to 30-year fixed mortgage rates is mortgage interest — both in the short and long term.A 30-year fixed term comes with a higher rate than a shorter fixed term, and it’s higher than the intro rate to a 30-year ARM. The higher your rate, the higher your monthly payment. You’ll also pay much more in interest over the life of your loan due to both the higher rate and the longer term.Learn more: How to get the lowest mortgage rates15-year fixed mortgage rates: Pros and consThe pros and cons of 15-year fixed mortgage rates are basically swapped from the 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you’ll pay off your mortgage 15 years sooner. So you’ll save potentially hundreds of thousands of dollars in interest over the course of your loan.However, because you’re paying off the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term.Adjustable mortgage rates: Pros and consAdjustable-rate mortgages lock in your rate for a predetermined amount of time, then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once per year for the remaining 25 years.The main advantage is that the introductory rate is usually lower than what you’ll get with a 30-year fixed rate, so your monthly payments will be lower.However, you have no idea what mortgage rates will be like once the intro-rate period ends, so you risk your rate increasing later. This could ultimately end up costing more, and your monthly payments are unpredictable from year to year.But if you plan to move before the intro-rate period is over, you could reap the benefits of a low rate without risking a rate increase down the road.Learn more: Adjustable-rate versus fixed-rate mortgageIs now a good time to buy a house?It might not feel like a good time to buy a house. Right now, 30-year rates are around 7%, which looks terrible compared to 2021, when you could lock in a rate of 3% or lower.It might be a better time to buy than you’d expect, though. The highest mortgage rate on record was 18.63% in October 1981, which makes a 6.84% rate not seem so bad. It’s also very unlikely that rates will drop to below 3% again anytime soon.And even though house prices are high, they are growing less rapidly than they were a couple of years ago. And new-home construction is starting to pick up.To sum it up, it’s still not the best time to buy a house because rates are relatively high and prices remain firm. But if the timing is right for you, your budget can accommodate the higher rates, and you’ve found the home for you, there’s no time like the present.Learn more: Is it better to build or buy a house?
See the full article on mortgage interest rates, or, read more Arizona real estate investing news.
