A combination of economic factors and the borrower’s financial profile influence mortgage rates in Washington, D.C.
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Interest rates play a big role in your monthly mortgage payment and how much your loan costs over time. You could save hundreds or thousands of dollars over time by getting a lower interest rate, but doing so may require a little work. Here’s a breakdown of how mortgage rates are set.
WEEKLY TRENDS AND INSIGHTS
On the week of September 8, 2024, the current average interest rate for a 30-year fixed-rate mortgage decreased NaN basis points from the prior week to %. The current average interest rate on a 15-year fixed-rate mortgage decreased NaN basis points from the prior week to %.
For context, a 30-year fixed-rate mortgage was NaN basis points higher a year ago. As for a 15-year fixed-rate mortgage, it was NaN basis points higher a year ago.
Mortgage lenders in Washington, D.C., use the same factors to determine interest rates that other lenders use across the U.S. However, interest rates can vary depending on the state or city you live in, according to the Consumer Financial Protection Bureau (CFPB).
Mortgage rates can shift due to various economic factors, and the rate you receive also depends on your financial standing. Here’s a breakdown of why mortgage rates fluctuate and how lenders determine rates in the nation’s capital:
More homebuyers tend to take out mortgage loans during periods of economic growth, which pushes mortgage rates higher. The opposite is true, too: Mortgage rates often plummet during economic downturns.
The Federal Reserve’s monetary policies also play a role. One of the central bank’s goals is to control inflation by changing its target for the federal funds rate. The Fed increases its benchmark rate when inflation is high in an effort to bring inflation down. The Fed may also lower the federal funds rate when inflation is low. Mortgage rates generally climb higher when the Fed rate rises and vice versa.
Global events can impact what we pay for goods and services as well as the cost of borrowing money at home. For instance, Russia’s invasion of Ukraine caused the U.S. and other countries to sanction Russian oil and other goods, which disrupted the supply chain.
Economic or political instability can also cause investors to sell assets tied to riskier countries and purchase investments tied to more stable countries. This may put downward pressure on mortgage rates.
The above factors help push rates into a general range, and your financial standing determines the rate you receive within those limits. Generally, you have a better chance of getting a lower interest rate if you have strong credit, a low debt-to-income ratio (DTI), a larger down payment, and funds in your savings account. These factors increase the likelihood that the home is affordable to you, which creates less risk for the lender.
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There are several homebuyer assistance programs in Washington, D.C., administered by the D.C. Housing Finance Agency (DCHFA). Depending on the program you choose, you may be able to take out an affordable home loan or get help paying for some of the upfront costs of buying property. You may — or may not — have to be a first-time homebuyer to take advantage of these offers:
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Mortgage rates drop or rise daily, reacting to changing economic conditions, central bank policy decisions, and investor sentiment. The table below shows recent trends in mortgage rates.
Product | Interest rate | APR | ||||
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General Information and Rate Disclosures: The listings that appear on this page are from companies that pay Credible compensation. This table does not include all companies or all available products. Displayed information is valid as of Sep 08, 2024 and assumes a customer with a 750 credit score borrowing a conventional loan for a single-family, primary residence, at or near zero discount points, and a 80% loan-to-home-value ratio. For products indicated as a jumbo (e.g. 30-year fixed jumbo rate), displayed information follows the same assumptions as a conventional loan but set at loan above the conforming limit. Here is an example of your payment based on a $400,000 loan amount, for each advertised loan term:
*Payments do not include amounts for taxes and insurance premiums, your actual payment obligation will be greater. The IP address of the customer accessing this page has been used to determine which U.S state should be used for pricing. In states where Credible does not have a license to operate, we are providing information about rates available in a nearby state. If you are viewing this page from an IP address in one of the states where Credible is not licensed, the rates displayed above are for consumers located in the neighbouring state shown below: IP state without license - Assumed location Missouri - Kansas Hawaii - California Rates, payments, and all information displayed are for informational purposes only and are subject to change without notice. This is not a credit decision or commitment to lend. Mortgage rates and terms you may qualify for depend on your individual financial circumstances. Payment Disclosures: All monthly payment amounts above assume on time monthly payments each month for the full duration of the loan term (e.g. 360 monthly payments for a 30 year loan). Displayed monthly payment amounts do not include amounts for property taxes and hazard insurance. Your actual monthly payment obligation will be higher. Amounts for borrower-paid mortgage insurance premiums are included in the monthly payment if (1) the loan amount is below the “conforming thresholds” set by Fannie Mae and Freddie Mac, and (2) the loan-to-home-value ratio is greater than 80%; mortgage insurance premiums are excluded from the monthly payment if either the loan amount is above the conforming thresholds or the loan-to-home-value ratio is less than or equal to 80%. Your actual payment obligation may be higher. “Conforming thresholds” depend on the county where the property is located. Fees Disclosures: The fee amounts shown above include estimates of loan costs and closing costs you may pay in connection with a mortgage transaction with the assumptions above. This includes fees the lender charges, including points and underwriting fees, and third party services the lender does not let you shop for such as a flood certification fee. It does not include title charges, recording costs, prepaids, initial escrow deposit, and other fees. ARM Disclosures: Variable rate products, such as ARMs, have interest rates that can change over the life of the loan. Changes in the interest rate will cause required payment amounts to change.” The displayed rate and payment will be in effect for the number of years in the product’s description (e.g. 5/1 ARM means the initial rate and payment are in effect for 5 years, 7/1 means they are in effect for 7 years, etc.), after which the rate and monthly payment will change every 12 months. Last updated on Sep 08, 2024. These rates are based on the assumptions shown here. Actual rates may vary. |
When you’re looking to buy a home in Washington, D.C., here are steps you can take to find the best mortgage rate:
Lenders in Washington, D.C., offer many different types of home loans, and the best one for you depends on your personal needs. The major mortgage programs include FHA loans, VA loans, and conventional loans, and lenders may also offer customized mortgages of their own. Here are some of your options in the nation’s capital:
An FHA loan is a type of home loan geared toward people with lower credit scores and smaller down payments. You may qualify for one of these mortgages with a credit score of at least 580 and a minimum down payment of 3.5%. If your credit score is lower, between 500 and 579, you’ll need to put down at least 10%.
Be prepared to pay an upfront mortgage insurance premium when taking out the loan, plus monthly mortgage insurance for at least 11 years.
A VA loan is another mortgage program that’s available through private banks and credit unions and guaranteed by a federal agency: the U.S. Department of Veterans Affairs. VA loans are available only to eligible service members, veterans, and surviving spouses.
If you qualify for a VA loan, you won’t have to make a down payment or pay for mortgage insurance. Plus, interest rates are competitive, and most buyers won’t have to worry about loan limits. But one downside is the upfront funding fee that you’ll pay at closing. The fee ranges between 1.25% and 3.3% of the home's purchase price, and you can choose to roll the fee into the loan principal.
A conventional home loan is any mortgage that isn’t backed by a government agency. The most common type is the conforming loan, which means it meets the requirements to be purchased by Fannie Mae or Freddie Mac. To qualify, borrowers typically need a credit score of at least 620, a maximum DTI of 45% in most cases, and a down payment of at least 3%.
These mortgages have high loan limits and no private mortgage insurance if your down payment is at least 20%.
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