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.
bills.com makes it easy to compare mortgage offers and different loan types. please visit the loans page and find a loan that meets your needs.
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.
i hope this information helps you find. learn. save.
best,
bills
The mortgage market: what's new?
It is expected that mortgage rates are subject to change. Homebuyers and those refinancing their mortgages should pay close attention to the latest mortgage rate
Mortgage rates September 13, 2023
According to Freddie Mac, the 30-year mortgage rate for the week of September 13, 2023 stands at 7.18%. This 6 basis points increase from the previous week's rate.
Additionally, Freddie Mac reports that the 15-year mortgage rate for September 13, 2023 is 6.51%, indicating a 1 basis points decrease 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 August 17, 2023 based on Zillow data for borrowers with a high credit score (680-740) in the United States:
- 30-year conventional loan is 7.27%
- 15-year conventional loan is 6.28%
Based on the provided rates, a $279,082 30-year mortgage would result in a monthly payment of $1,908. Alternatively, a 15-year mortgage would require a monthly payment of around $2,397.
Explore your options and secure pre-approval today!
To make your life easier, we highly recommend shopping around for mortgages and getting pre-approved. This will streamline the home-buying or refinancing process and make it a breeze. Ready to get started? Check Out mortgage rates now for the best options available.
8 Comments
I suggest you look at what the maximum mortgage payment could be in six years, if rates go up. If you see that there is no way that you can afford such a payment, then realize that while your action now may be the wisest course to remain in your home, it is no guarantee that you will be able to stay in the home down the road.
Perhaps you would be well served by applying with another mortgage lender. The only risk in that scenario is if your credit score is right on the borderline of qualifying with the lender that is offering the 7/1 ARM. Having another lender pull your credit, if it has been more than 14 days since your credit was pulled by the first lender, could drop your score a few points.
As to whether or not you can refinance after two years, if the market conditions merit it, the answer is yes. In fact, you can refinance sooner. The key issue in terms of timing is the length of a pre-pay penalty, if any, on your loan. Most ARMs come with some kind of pre-pay penalty. Make sure you know how long it lasts, if your loan comes with one.