Mortgage rates are currently sitting at a high point for the last few months. This is primarily due to the Iran war conflict currently going on. Mortgage interest rates are not an isolated product – they are impacted by global factors and national factors as well. We know that the Fed sets the Prime Rate which impacts borrowing costs for us, but not directly mortgage interest rates although their decisions do trickle down to the mortgage market. The fed is in a tough spot right now because unemployment is not looking good – which would be a factor to lower rates. However, inflation is stubbornly high and the Iran war is exacerbating this due to the spike in oil prices. Oil is in so many products. With high oil prices, the cost of just about everything goes up, especially gas prices. All consumers feel gas costs directly when they fill their cars up and indirectly in the cost of goods that are transported by trucks, rail or air – all of which use gasoline. So, the Fed is caught in the middle of two factors pulling them in opposite directions. That means they will do nothing and leave rates where they are.
I believe mortgage rates will come down, but for that to happen, the economy actually needs to slow down. The Fed lowers rates as a way to stimulate the economy. We are a consumer-based economy, which simply means our economy is based upon and needs the consumer to spend…a lot. So, when the economy is humming along and doing well, rates tend to go up to keep inflation at bay. The Fed only lowers rates (which trickles down to mortgage rates) when the economy is slowing down or hurting, such as with bad employment numbers or other negative economic factors, because they need to make borrowing cheaper for people to spend money.
When you factor all of that into the equation, mortgage rates should fall from where they are now. As the Iran war wraps up, oil prices will fall and that will put inflation back down, which gives the Fed more room to lower rates if the job market continues to show weakness. Also, many parts of the country are showing weakness in housing and housing is a huge driver of the economy. So, the Fed wants housing to be strong – and lower rates make that possible for more people.
In a nutshell, the mortgage market is counter cyclical – for lower rates you actually need a weaker economy or uncertainty in the market to drive rates down and incentivize borrowing.
So, should you lock now? If you are buying a home, my answer, with 20 years of mortgage experience, is yes…definitely lock now. Why? Because you are locking in the price of a home which you will own for many years and as rates go down, home values tend to go up with supply and demand. Buy the house now and lock in that price and value. Then when or if rates go down, you can always refinance.
If you are considering a refinance, it may still make sense to lock now, but that will vary a lot based upon the specifics of your situation, such as your current rate, amount owed and value of the home, as well as credit scores and debt loads etc. You need to talk to an experienced loan officer that will look at your entire financial picture and not just the mortgage by itself.
The reality is that current rates (April 2026) are extremely volatile, but I believe in volatile times you can make great financial decisions – such as locking in a home price in areas that are buyers’ markets and getting a better price on the home and/or getting seller paid closing costs, which we are seeing on most of our contracts currently. Most wealthy people I know look for volatile markets and times because that’s when you can make some decisions financially that can benefit you greatly in the long term. We offer Rate Secured, which allows you to lock in a rate for 90 days, while you are looking for a home. In volatile markets like we are currently in, this is a great thing to utilize. If rates go down, your rate is adjusted. If rates go up, you get to keep the lower rate that you locked.
Mason Whitehead | NMLS# 218140
Branch Manager
Office/Fax: (972)-895-4775
Mobile: (214)-228-5794
Website: Mason Whitehead
This is one of the biggest concerns I’m hearing from my buyers right now. As rates fluctuate, affordability is a major concern for buyers. Mortgage rates remain in the 6% nationally, which keeps monthly payments high.
Even with qualified borrowers, the payment may not feel comfortable once taxes, insurance and homeowners’ association dues are added into the payment.
As rates go down, it helps with the monthly principal and interest portion of the payment. This is when buyers need to have a budget and find the payment that makes sense, without feeling house poor.
Here is an example:
A $300,000 mortgage at 6.25% over 30 years is about $1,847/month for principal and interest alone. Over the life of the loan, that’s about $365,000 in interest
Cody Levinson | NMLS# 13837
Producing Branch Manager
Office/Fax: (402)-509-7553
Mobile: (402)-618-0154
Website: Cody Levinson
So, you’re thinking about buying a new home - maybe you’re a first-time home buyer and looking to get into the housing market and explore homeownership for the first time – or maybe you already own your home and you have that “itch” to upgrade to that next move-up property. In any case, the question that keeps coming up more than anything else in your mind is “should I buy now or should I wait for interest rates to come down. Or, maybe I should wait for the house prices to retract some, so I can get a better deal on that home price”. These are questions that I answer all the time for my prospective home buyers that are unsure about the best timing to finally take the plunge on jumping into the housing market.
Let’s talk about these market timing questions in reverse order.
The undeniable reality of the housing market regarding home prices and appreciation rates is that prices are completely driven by supply and demand. The lower the supply (inventory) of houses on the market in any given area relative to the demand (i.e. prospective homebuyers desiring to purchase a home), the more likely that the prices of those homes will increase over time (i.e. house price appreciation) and the more apt that homebuyers will experience competition for any given home that they may desire to try to purchase. This can result in multiple offers that you may need to compete against and a phenomena called “price escalation,” which is when prospective homebuyers actually bid up the price they are willing to offer on a property above the list price of the home, in an effort to beat other competing homebuyers in buying that property. For many areas that we serve the supply of homes is much lower than the number of people that need to purchase homes to live in. This is fundamentally due to the new housing construction industry “under-building” the number of new homes that are needed to keep up with the population growth in the United States. This issue can certainly vary from one geographic area to another, as population shifts occur. Generally speaking, this under-building situation has been occurring in the US at large for about 15 years. Because of this, my view is that waiting for house prices to come down in any significant way is simply a bad bet. In fact, available data on new home construction versus new household formation suggests that there is simply no end in sight to this fundamental under supply of homes in the country. Thus, no end in sight to constant price appreciation of residential real estate in the foreseeable future. Particularly for first time homebuyers, the sooner that you own a home the sooner this constant price appreciation that is working against you as a barrier to homeownership will turn into a positive benefit in growing your net worth.
Mortgage interest rates have become a sticking point for many people when thinking about jumping into the housing market in recent years. While the collective mentality has certainly been that mortgage rates are “higher than normal” or are too high to consider buying, that type of thinking really misses the point and has led to many people putting their housing dreams on hold for long periods of time or in some cases staying out of the market completely and missing out on the opportunity to build wealth. A better question to ask than “what are the current mortgage rates”, is “what is my budget for a housing payment” and “does that housing payment that I am comfortable affording buy me the house I need to own to fit my needs”. The reality is that if mortgage rates are higher than average at any given time, they will come down at some point in the future. If you took out a mortgage in a higher interest rate environment, you will likely be able to refinance that mortgage into a lower interest rate with a lower payment when the mortgage rates eventually come down. The key is to figure out whether you can afford the payment within your current budget right now for a house that will fit your needs. For a minute there was a catch phrase made popular in the real estate industry that proclaimed that you should “marry the real estate but date the mortgage rate”. As cringe as that may sound, it still rings true as a concept whenever the mortgage rates are higher than their perceived average has been. The supply and demand reality also dictates that if you wait for mortgage rates to come down into a range where the collective wisdom says it’s a good time to take out a mortgage to buy a home, that will undoubtedly bring more buyers into the real estate market. This increases the demand for housing and inevitably raises competition for properties and raises the prices for those properties. Provided that you can afford the mortgage payment for a given property, you are better off buying in a higher interest rate environment and refinancing later into a lower rate and payment, than waiting for the price of that house to go up, because of the higher demand that lower mortgage rates will bring with it. As it turns out, “Marry the real estate and date the mortgage rate” may not be so cringe after all…
Erik Spencer | NMLS# 187020
Senior Mortgage Advisor
Call/Text/Fax: (703)-801-5569
Website: Erik Spencer
Credit score and financial history play a big factor in your overall financing for a mortgage loan. Your credit score is one of the first things lenders look at once you have submitted your application. We pull a tri-merge, which consists of Trans Union, Experian & Equifax. Once we have pulled all three bureaus, we use the middle score of the 3 to qualify you. If there are multiple borrowers on the loan, we use the lowest middle score of all borrowers. When the loan is run through to price out the interest rate, the credit score determines the rate. While credit score plays a big role in getting approved, it’s not the only factor that needs to be considered. Your debt-to-income ratio also plays a deciding role in the approval. To calculate the debt-to-income ratio, we use the total (gross) monthly income divided by all debts, which report on your credit. Additionally, if you have any reoccurring debts that don’t report on credit (additional housing, deferred department store or credit card debts, etc.) these would be added in as well. We do not include utilities such as cable, electric, water, garbage. Finally, the down payment and total loan amount will also determine your approval. All applications are run through an “automated underwriting” system. This automated system looks at your credit history, credit score, debt-to-income ratio and loan amount when determining the approval. It’s important to note that the automated system isn’t the final determination for your approval. There are situations where we can still get you approved even if the automated system says no.
The important thing to remember is that no matter what your situation may be, there are always ways to improve. For example, if I have a borrower with a lower credit score, I will run it through my credit simulation system, which will review the current report and give suggestions to help improve the score. If I have an application with a debt-to-income ratio over the allowable limit, I will first look to see if there is anything we can payoff to reduce the ratio. If that’s not an option, we can also look at adding a co-signer on the loan to increase the qualifying income. If the approval is dependent upon a higher down payment, I will often suggest that the borrower get a gift from family to increase the down payment amount which can help with the approval. These are just a few examples of how I have been able to strengthen files and get approved.
It’s important to be honest and upfront with your loan officer when applying for a mortgage. It’s also very important that the loan officer asks the right questions, so that underwriting can see the entire financial profile. Working with a reputable mortgage loan officer can make all the difference when it comes to getting approved to buy a home.
Check out our guide, “Credit Scores and Buying a Home,” for more info.
Brad Dexter | NMLS# 78146
Branch Operations Manager
Call/Text/Fax: (402)-525-5008
Website: Brad Dexter
There truly isn’t one loan program that best fits everyone. The right option depends on things like credit score, down payment amount, income, and your long-term plans for the home/mortgage. My goal is to bring clarity to the process and help give options. I believe the person with the most options can make the best decision.
Conventional loans – This is typically the strongest option, if you qualify and your credit score is above 700. They often have competitive rates, flexible terms, and lower long-term costs. Many families find this puts them in the best overall position long and short term.
FHA loans – This is a great option if credit is a bit lower or if you’re looking for a smaller down payment and not a first-time homebuyer. This loan type can help make homeownership possible sooner and save in interest.
VA or USDA loans – These are excellent programs for those who qualify, often allowing little to no down payment.
Each loan type can have different rates, payments, and requirements, so sometimes even a small change can make a big difference. Need to purchase in a rural area or be a veteran for the VA loan program.
I want to help every family that I serve get the loan which is best for them. I’m always happy to walk through the options with you and bring clarity every step of the way.
For more info on our loan programs, check out our website here.
Seth Vanderwey | NMLS# 1376027
Home Loan Specialist
Call/Text/Fax: (616)-325-1052
Mobile: (616)-204-4016
Website: Seth Vanderwey
