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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: The Image Bank/Getty Images April 05, 2021 Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
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Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. As COVID vaccinations become widely available and public health restrictions ease, Melissa Cohn sees a new reality: Record-low are in the rear-view mirror. A reopening economy means 30-year mortgage rates under 3 percent are a rarity rather than a rule, says Cohn, executive mortgage banker at William Raveis Mortgage. She spoke to Bankrate about mortgages and the housing market. What s your biggest challenge right now
Rising mortgage rates. We spent the past year in a historically low rate environment. The 10-year Treasury started the year at under 1 percent. It’s up 75 basis points. The most important thing we’re trying to do right now is helping people reset their expectations in terms of interest rates. Some people are saying, “I’m not going to do this unless I can get a rate of 2.75 percent.” You can’t get a 30-year fixed at 2.75 percent with no points — but you can pay points and get there. Or you can get an adjustable-rate mortgage and get the rate you want. You just have to understand that things do change. Rates were really low because our economy was really bad because of the pandemic. Hundreds of thousands of people have died. Millions of people were out of work. But the good news is the economy is starting to get better. That’s all good for the world, but it does mean rates are starting to go up. Speaking of points some say they re a thing of the past
I disagree. We’ve all become very enamored of having interest rates below 3 percent. You can buy down the rate by paying points. Points are still tax-deductible. If you want a lower rate and a tax deduction, paying points is not such a bad idea. You get the instant gratification of the tax deduction this year, and then you get the ongoing benefit of the lower payment in years to come. I wouldn’t say points are a thing of the past. They’re certainly not predominant. But we’re seeing more people being willing to pay points, especially on investment properties. For shoppers wading into the spring buying season what advice do you give
Gone are the days of the lollygaggers saying, “I have time.” If you’re looking to buy in New York City, you have all the time in the world. There are 15,000 unsold condominiums waiting for you to buy. But in the suburbs, with rising interest rates, if you snooze, you lose. In Florida, properties are disappearing from the market in a day. In terms of your mortgage, the most important advice is that you shop around. You don’t want to rely on just one bank. There’s so much disparity from lender to lender. When you’re shopping around, the most important thing is rate. You want to make sure the rate is something you can lock in. Closing costs have become more competitive and more of a level playing field, but you want to make sure you’re not paying a lot of junk fees. And make sure you get current quotes. People will say, “So and so gave me a good rate last week.” Well, that was last week. I probably had that rate last week, too. With rates being as fluid as they are right now, you don’t have a week or 10 days to shop around. Banks have really fine-tuned how they price interest rates. Your credit score is everything today. If your score is below 720, you really want to get it to 720. Banks are looking for higher credit scores, bigger down payments, and lower debt to income. They’re also basing rates on whether it’s a second home. What will the mortgage market and housing market look like after the pandemic
The economy is going to go back to whatever the new normal will be. We could see 4 percent rates again, or 4.5 percent, although not until 2022. The question is when are we going to have a properly vaccinated society? When can we go back to work? When can we go out to lunch again? When will we buy clothes that aren’t sweatpants? It’s changed the world. We’ve learned that we can work from home. Banks are going to remain more conservative in their lending. I’ve seen bankers saying they’re really concerned the bubble is going to burst. Those who qualify can get the A rates. But that whole group of people who lost their jobs during the pandemic are going to have to wait years before they can qualify. Some people are going to be forced to take . Learn more
SHARE: Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. Related Articles