Mortgage rate forecasts for September 2021
- Mortgage rates have been below 3% for over two months and this trend should continue into September
- The housing stock is improving slightly, but remains extremely low. That means homebuyers continue to struggle with high prices
- You have time to refinance yourself to a better deal as the Federal Reserve is likely to continue its low interest rate policy in the coming months
the currently low mortgage rates is great news for homeowners who haven’t hit a new low yet Refinancing rate recently. But homebuyers still face an uphill battle with selling prices soaring rapidly, potentially wiping out any savings from low prices.
the average fixed-rate mortgage over 30 years stayed nearby 3% for monthsbut some experts Predict mortgage rates will be higher by the end of 2021. Experts expect interest rates won’t soar overnight, barring surprises.
Here’s what four experts predict with September 2021 mortgage rates.
Castleigh Johnson, Founder and CEO of My Home Pathway
In the coming weeks, Johnson sees prices stay the same. “Interest rates themselves are not going to come down significantly at all, and I don’t think the upward pressure will be enough to drive interest rates much higher,” he says. Since the beginning of the pandemic, the US economy has made significant strides in returning to pre-pandemic levels. Strong economic data usually drives interest rates higher, but there is still enough uncertainty to prevent interest rates from rising dramatically. “Even with this economic recovery, there are still concerns about the impact of the virus – the Delta variant,” Johnson says.
the Housing market is still hotso homebuyers looking to close a deal on a low-interest mortgage still face higher prices. Even if it’s still a Seller market, there are signs that things could get better for buyers. Prices are dropping a bit and homes take a little longer to sell, Johnson says. As a buyer, you can also be patient when looking for an apartment, if your personal circumstances permit. “I don’t see much upward pressure … rate pressure, you know, three to six months out, so you can still postpone [your home purchase] by early 2021, ”says Johnson. So you don’t have to rush to close a deal for fear of missing out on today’s great mortgage rates.
Mitria Wilson-Spotser, director of housing policy for the Consumer Federal of America
Wilson spotser expects mortgage rates to stay below 3% this month. If the economy improves, the US Federal Reserve is expected to eventually cut its current rate on mortgage bond purchases, which will drive interest rates higher. However, the economic impact of the Delta option has likely delayed these plans. “Probably later, if not October, rates could move a little closer to 3% or possibly a little above,” she says.
With interest rates remaining low, this is good news for borrowers. “If you are able to refinance, it is a good time to refinance and take advantage of historically low interest rates“Says Wilson-Spotser. Home buyers have access to the same low prices but have to deal with a competitive housing market. “We have a pretty tight real estate market,” she says. Housing stocks are low and not enough homes are being built to meet demand. “That sometimes makes it difficult for consumers to take advantage of the low interest rate.”
Gordon Miller, President of the Miller Lending Group
For September Müller believes we will likely see more of this in mortgage rates. “Consistent as it goes,” he says. There is still too much uncertainty about the economy and the coronavirus for interest rates to jump in the coming weeks. “You’re just not in the calm waters yet,” says Miller. As long as these potential risks exist, interest rates will not rise.
Now is a good time to think about it Refinancing. We’re back near the lows, so it’s a very good time to assess your current situation before any Federal Reserve policy changes, says Miller. Although it’s impossible to predict the future, Miller expects rates to stay low through October this year. So you have time to shopping spree and find them the right offer for you. Later in the year, we could see rates start rising in anticipation of the Federal Reserve’s announcement of a policy change that has kept rates low.
Willie McGuire, Area Branch Manager at Cardinal Financial
McGuire do not expect a major move in mortgage rates in September. “I don’t see anything that could move the needle drastically,” says McGuire. As we see new economic data on inflation, employment, and the Federal Reserve’s policy decisions, you can expect day-to-day and week-to-week changes, but these changes could cancel each other out. “As long as consumers are patient … if we see a quarter percent increase, you can easily see that tick drop again.”
This is still an exception for borrowers Low interest rate environment, so the opportunities to save are there, but it’s a good idea to look around. “Talk to reputable locals Lender“Says McGuire. “Get an offer from your bank, but also pay attention to the processing times. See how quickly they can complete the loan transaction for you. ”And remember that it’s not just the interest rate that needs to be taken into account, and that the advertised interest rates are not always the case what you qualify for. “Many lenders publish teaser rates. Teaser rates should increase traffic and cause a stir, ”says McGuire. “Unfortunately, at the end of the day, many consumers feel cheated when they find it wasn’t what they thought it was.” They may not qualify for this one exceptionally low prices or the rate could have additional fees built in, I’ll do it overall more expensive.
What does the September interest rate forecast mean for refinancing?
As house prices further increase, many homeowners who have missed the refinancing craze have another chance to think about refinancing. When you have more equity, you can qualify for a lower interest rate or save money each month by doing Abolition of private mortgage insurance (PMI).
As a rule of thumb, you want to be able to reduce your interest rate by at least 0.75% -1% for one rate and one term refinance to make sense. But refinancing is not as easy as comparing the interest rate. There are fees to consider, and a low interest rate could come with additional fees from the lender, such as: Discount points. Hence, it is important to compare the tariff and fees that are on your Credit estimate.
A refinancing example
Here is an example showing how a refinance can lower the interest you would pay over the life of a loan and lower your monthly payment:
- Home purchase value: $ 320,000
- 10% Down Payment: $ 32,000
- 30-year fixed-rate mortgage
- 4.25% interest rate on the $ 288,000 loan (after down payment)
After four years of making payments, your loan balance would be around $ 266,851, according to NextAdvisor Mortgage calculator.
By extending your existing mortgage through a 30-year refinancing With a 3.25% loan, you’d cut your monthly payment by $ 255 and cut interest rates by nearly $ 23,000.
|Loan amount||interest rate||Monthly principal and interest payment||Total remaining interest|
|Current loan||$ 266,851||4.25%||$ 1,416||$ 174,096|
|Refinance credit||$ 266,851||3.25%||$ 1,161||$ 151,323|
|difference||–||1%||$ 255||$ 22,773|
However, the closing costs of the refinancing can be between 3% and 6% of the loan amount. All of these fees reduce what you save and if you resell or refinance before you buy Break-even point, then you may end up saving nothing at all. For the $ 266,851 refinance, you could pay $ 8,000 to $ 16,000 in closing costs. With your $ 255 a month, it would take you roughly 2.5 to 5 years to break even.