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In 2020, the COVID-19 pandemic took the world by surprise, resulting in a domino effect that impacted numerous aspects of our lives. A major dip in mortgage rates was part of the aftermath, which just kept continuing to drop until they hit historical lows. First-time and seasoned homebuyers jumped at the chance to obtain a mortgage and purchase a home; many existing homeowners made the wise financial decision to refinance an older mortgage and obtain a new home loan with a lower rate. As the economy begins to recover and mortgage rates start to rise, people who haven’t refinanced older home loans yet are questioning what their next move should be.

Staying on top of trends

It is difficult to predict whether mortgage rates will stay relatively the same for the time being or if they will begin to climb up sooner than anticipated. Different sources have their own predictions; some experts, for instance, predict that rates will stay flat and low at near 3% through the end of 2021. Trends show that over the last year, 30- year mortgage rates have gone up slightly and down, but for the most part, have hovered around 3% or less.  The 30-year mortgage rates for Filo Mortgage have ranged from 2.375% to 2.875% with no points over the last twelve months.

While mortgage rates have gone up slightly, they are still historically low, and now can be a great time to refinance into a lower payment. Waiting to see if they drop again can be a gamble; it may take a while before they do drop again if they do at all.

Keep an eye out for inflation data.  If inflation starts to increase, then it is likely mortgage rates will follow.  In addition, mortgage rates tend to move in the opposite direction of the economy.  So as the economy improves, mortgage rates tend to increase.  However, if the economy were to worsen then mortgage rates could trend down further.

You can follow mortgage rates by paying close attention to the 10-year treasury rate.  The 10-year Treasury note is closely tied to and correlates with the 30-year mortgage rate.

Locking in a low fixed rate

As post-pandemic life slowly begins to return to normal, it also means that the economy will inevitably improve and mortgage rates may follow suit.  Even if rates do slowly climb, an older home loan will most likely have a higher interest rate than Filo’s current market rates. If you plan on keeping your home for many more years, or you’re able to refinance into a shorter loan term, refinancing with today’s rates may still save you a lot of money in the long run. Refinancing now can also give you the opportunity to obtain a different type of loan entirely if you want a new, fixed rate. If you’ve been waiting for the perfect time to convert your adjustable-rate mortgage into a fixed-rate mortgage, that time is now.

Put a plan in action to improve your credit, if needed

If you haven’t already, be sure to check your credit report to see where you stand.  All of the major credit bureaus including Equifax, Transunion, and Experian offer free credit reports. Although mortgage rates are at all-time lows, you will qualify for the best possible rate by having a higher credit score.  A few quick and easy ways to improve your credit score include paying off any derogatory accounts and closing a credit card account or two.

Refinance your mortgage with today’s rates

Waiting to see if mortgage rates will drop again can be risky, so if you’re ready to refinance your mortgage, don’t hesitate. Lock-in today’s rates before they skyrocket and refinance with Filo Mortgage today!