Predictions for May 2021
Do you want to get ahead of the curve when it comes to mortgage rates in May? Here you’ll find certain things that you should keep in mind for May.
Is It Possible That Mortgage Rates Will Fall in May?
Even though 30-year fixed rates dropped to 3.04 percent on April 15, despite unexpected rate declines in April, mortgage rates seem to be on the rise again.
Why did interest rates drop, to begin with? The short response is that COVID continues to wreak havoc on financial markets.
In May, there is a good chance that mortgage rates will be lower. If this occurs, it would almost certainly be a blip in an otherwise upward trend. We would not recommend relying on lower rates for an extended period.
What Caused the Drop In Mortgage Rates in April?
We were watching various major economic reports in April, including jobs and unemployment, inflation, and retail sales.
These reports are essential indicators of the state of the economy. They may also have a significant effect on mortgage rates.
This month’s reports have been a resounding success, as anticipated. Despite this, mortgage rates have dropped.
That is the polar opposite of what a ‘normal’ market should do. So, what is going on? A quick and straightforward answer is that this is not a regular market. COVID is still in the driver’s seat.
May 2021 Mortgage Strategies
With mortgage rates rising, we assume the following are the most relevant tactics for homeowners and homebuyers in the coming months.
1. Is your credit score high? Do not be afraid to bargain
You can easily choose lenders, loan plans, and interest rates from a list.
The biggest mistake you can make is accepting the first offer you get when purchasing a house.
2. Make sure to look into all your options if you have a low credit
If you are looking for a home loan but have a poor credit score or a low down payment, you should apply with many lenders.
This is particularly valid for borrowers with FICO scores between 700 and 720 or those with non-traditional income sources such as self-employment.
3. Make the most of your discount points.
By paying extra at closing, you will ‘buy down’ your mortgage rate with discount points.
It is not inexpensive to do so. To reduce your rate by 0.25 percent, you will typically pay 1% of your loan sum.
However, if you choose to stay in your home for at least 5 years, the net savings will far outweigh the expense of discount points.
4. It’s time to raise the stakes on your deals for buyers
If they want your offer to be accepted on their dream home in today’s real estate market, buyers must be well informed and prepared.
What should you do to increase your chances?
1. Before you make a bid, get pre-approved for a mortgage. Many sellers and agents would not even consider an offer unless it comes with a pre-approval letter.
2. Do not bid the entire sum of your pre-approved bid right away.
3. There should not be too many contingencies in your plan. Sellers can consider a bid with fewer contingencies in a hot market, so keep yours to a minimum.
4. Do not forget to have your house inspected. This will seem appealing because it will allow you to complete your purchase more quickly.
Today’s Mortgage Rates
While keeping track of monthly mortgage rate forecasts and weekly averages can be beneficial, keep in mind that rates change regularly. Visit our regular rate update to get a quick overview of what is going on today. You will find current rates as well as suggestions.