What is a 30yr. fixed and what is 7yr ARM
What is a 30yr fix loan and what is 7yr ARm loan?
your question refers to mortgage loan nomenclature, which can be confusing:
a 30-year fixed-rate loan is a loan where the principal is repaid over a 30-year period and the interest rate your lender charges is fixed for the life of the loan.
a 7-year arm (or any arm) is an "adjustable rate mortgage" where the loan's interest rate is fixed for a short period of time (in this case, 7 years) and then readjusts for the remaining term of the loan to an adjustable market rate. if rates go down, you benefit... but if rates go up your rate will increase and your monthly payment could rise.
i hope that his helps you make the right decision for your particular situation. make sure to shop around to find the best loan you can.
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Mortgage market: a pulse check
Mortgage rate fluctuations should come as no surprise. If you are buying a home or refinancing your existing mortgage, it is important to stay informed about the current mortgage rates.
Mortgage rates February 21, 2024
According to Freddie Mac, the 30-year mortgage rate for the week of February 21, 2024 stands at 6.9%. This 13 basis points increase from the previous week's rate.
Additionally, Freddie Mac reports that the 15-year mortgage rate for February 21, 2024 is 6.29%, indicating a 17 basis points increase from previous week’s rates.
Note: A basis point is equal to one-hundredth of one percent (0.01%). In numerical terms, if the mortgage rate changes by 20 basis points, it means the rate has changed by 0.20%.
Understanding the impact of mortgage rates on your finances
When it comes to determining your monthly payment, mortgage rates are a key factor to consider. Here are the avergage interest rates (APR) for February 25, 2024 based on Zillow data for borrowers with a high credit score (680-740) in the United States:
- 30-year conventional loan is 6.88%
- 15-year conventional loan is 6.08%
Based on the provided rates, a $279,082 30-year mortgage would result in a monthly payment of $1,834. Alternatively, a 15-year mortgage would require a monthly payment of around $2,367.
Simplify your mortgage journey: Shop around and get pre-approved today!
To make the home-buying or refinancing process a breeze, we highly recommend shopping around for mortgages and getting pre-approved. So, why not Check Out mortgage rates now for the best options available.