Despite the recent housing crisis, the dream of home ownership has not faded for many of the millions who are still renting or are living with family members. In fact, if historical interest rates and home prices are any indication, then this may be the best-possible time to apply for a home mortgage.
Of course, the best way to know exactly what interest rate you would actually qualify for with a new home loan would be to apply for one. But, before doing that, it can be useful to get a handle on where average rates are today as compared to recent and historical trends.
Before you search for current home loan interest rates, become familiar with these 3 things to look for in current vs. past home loan interest rates:
1. Understand where mortgage rates are today in the context of historical trends:
Looking at today’s home loan interest rates can tell you something meaningful only when looked at in the context of where they have been. And, while nobody can predict what rates will do tomorrow, looking at a simple graph or “trend chart” will help you see where they seem to be headed.
Of course, when looked at as a whole, the interest rates for a given group of people in a certain city or the entire country are going to span a wide range. That is why the way that companies who track this type of information do so is to compile trend charts that show national average mortgage rates over time. By looking at average rates over a period of months or years, you can get a good sense for where things are now relative to the past.
2. Find rates for the type of loan you are seeking:
It is useful to look at rate trend charts for the type of loan that you are considering. For example, if you are interested in a 30-year fixed-rate loan (the most common type of mortgage), then look at a trend chart that shows national average rates for that type of loan. Similarly, do the same for 15-year, and 5/1 combined adjustable rate mortgages if one of those is the type of loan you need.
3. Compare different trend timelines:
You can find historical rate information on different timelines. The most common are three-month, one-year, three-year and long-term (2-3 decades or more) time periods. By looking at these various snapshots of home loan rate trend information, you can get a good sense of whether it makes sense to buy a home at this time.