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As mortgage rates continue to climb, the cost of lending continues to increase as well, which will impact the bottom lines of borrowers and homeowners. In June 2022, mortgage rates are 2 percentage points higher than they were in January 2022. In fact, the biggest quarterly increase in 28 years was registered in Q1 of 2022. Therefore, if you’re hoping to see mortgage interest rates fall, you may be waiting for some time.

One of the main reasons that rates are expected to climb is inflation. As of March 2022, the CPI- or consumer price index– rose to 8.5%. This is the highest it’s been since 1981.

Another reason is the rate hike from the Federal Reserve that hit in March 2022. This is the first increase since 2018.

Experts expect a total of 7 Federal Reserve rate increases in 2022. As of June 2, 2022, rates on a 30-year mortgage have already risen to 5.09%. In June 2021, they were sitting at 2.99%.

If you are in need of a mortgage in or near Wilmington, North Carolina, consider working with Creekmore Realty Group. They will work with you to find a house on your terms. By working alongside Creekmore Realty, they can help you understand what you can expect with the mortgage rates in 2022.

June 2022 Mortgage Rate Forecast

Factors such as inflation and the monetary policy of the Federal Reserve are putting pressure on mortgage rates. As inflation rises, the Fed applies a more aggressive monetary policy, which translates to higher mortgage rates.

According to experts, by the end of 2022, the 30-year fixed mortgage rate is going to vary from 4.8% to 5.5%.

Is There Time to Refinance?

Since mortgage interest rates are rising so quickly, homeowners are rushing to save money on refinancing. At this time, the average rate on a 30-year fixed mortgage is around 5.10%, which means that almost 1.3 million homeowners are eligible to reduce their rate by 0.75% or more, according to analysts.

Every time the rates increase, fewer borrowers will save by refinancing. In order to refinance, you’ll need at least a 720 credit score, 20% equity in your home, and the ability to save at least 0.75% by refinancing into a 30-year fixed mortgage.

It is important to note that while refinancing may lead to a lower monthly payment, it may not lead to less interest over the life of the loan. For example, if you refinance from a 5% mortgage with 26 years left on it to a 30-year mortgage with a 4% interest rate, you’ll pay more than $13,000 in interest.

Before shopping around for a lender, you should find a mortgage calculator to determine how much you can save. You may also want to think about how long you plan to remain in your home, as closing costs may eat up the savings if you plan to sell soon after refinancing. Depending on the lender, closing costs typically run between 2% to 5% of the loan amount. Therefore, if you decide that you want to refinance, you need to plan on staying in your home long enough for the savings to matter.

Also keep in mind that your rate depends on several factors:

  • Your credit score
  • Your debt-to-income ratio
  • The loan-to-value ratio
  • Proof of steady income

Current Trends & Rates for June 2022

As of June 2022, the average weekly rate for a 30-year fixed mortgage jumped to 5.09% from 3.22% in January. The average rate on a 15-year fixed mortgage increased to 4.32% from 2.43%. Since 2019, mortgage rates remained under 4%. However, in mid-March 2022, they began to exceed 5%.

If you are in need of a mortgage in or near Wilmington, North Carolina, consider working with Creekmore Realty Group. They can help you find a house that best fits your needs and finances. By working with Creekmore Realty, they can help you understand what to expect with the mortgage rates in 2022.