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4 mortgage interest rate myths to know now
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Homebuyers and owners looking to refinance finally received a bit of positive news on September 18 when the Federal Reserve issued a reduction to its federal funds rate, its first since 2020. Anticipating that cut, mortgage lenders started reducing their offers, resulting in mortgage rates plunging to their lowest point in two years, or since September 2022. And they’ve continued to drop in the week since.
These drops, and the potential for additional reductions in November and December, are exciting for homebuyers. Mortgage rates rose exponentially in recent years alongside the inflation rate, hitting their highest point since 2000 in 2023, so any relief is welcome. To truly take advantage of this evolving climate, however, it helps to know the nuances of the mortgage interest rate climate. And that means being able to dispel some popular mortgage interest rate myths. Below, we’ll break down four of them.
See how low of a mortgage interest rate you could lock in here now.
4 mortgage interest rate myths to know now
Considering entering the homebuying market now? Ready to apply for a refinance? Don’t do so without first knowing the truth behind these four popular myths.
Mortgage interest rates will fall alongside the Fed
Sure, mortgage interest rates can and likely will fall as the federal funds rate does. But they won’t fall by precisely the same amount or even at the same time, as some lenders start pricing in presumed rate cuts before they’re official. That’s why the mortgage interest rates most are seeing listed online this week aren’t materially different than what was listed earlier in September. So don’t budget for exact reductions solely based on how the Fed acts as mortgage rates are influenced by more than just that.
Start exploring your current mortgage rate options online today.
Mortgage interest rates could fall back to where they were
Mortgage interest rates will likely fall in the months again, perhaps by a somewhat significant margin. But they’re highly unlikely to fall back to where they were in 2020 and 2021 during the height of the pandemic. That’s when the economy was different from where it is now and rates were near record lows. Don’t count on that happening again, minus a major economic driver. And remember that today’s mortgage rates, historically, are already on the low end. So don’t expect them to fall to 3% again.
The mortgage rate you see listed online is the one you’ll get
It can be smart (and addicting) to check mortgage rates each day. But it’s critical to remember that the one you see listed online on a lender’s website isn’t necessarily the one you’ll be offered. That’s because mortgage rates listed online are for those with the cleanest credit histories and highest credit scores. If you don’t have both, you’ll be offered a higher rate. But that’s not the only caveat. Mortgage rate listings often also have mortgage points and other reductions already accounted for. So the rate you’re offered, even with a high credit score, could ultimately be higher if you forego paying for those fees and reductions. Read the fine print accordingly.
Mortgage and mortgage refinance rates are the same
Are you a homeowner eager to refinance and see now as your opportunity to act? You may not be wrong. Just be sure that you’re checking the right column online as mortgage interest rates for purchases and those for refinancing existing loans are not the same. And there could be a 25 basis point difference (or more), between the two. Make sure to monitor the right rate type, then, before getting started.
Compare the different mortgage purchase and refinance rates available to you here.
The bottom line
The homebuying and refinancing processes can be stressful enough without having to deal with incomplete or misleading information. So be sure to clearly understand the above myths and their corresponding realities. By doing so you can better position yourself for homebuying (or refinancing) success both now and along your longer homeownership journey.
CBS News
Lithium battery fires on U.S. flights now occur nearly twice a week, according to new FAA data
As millions prepare to fly for the holidays, the Federal Aviation Administration is warning travelers about a hidden danger in their luggage: lithium-ion batteries. Found in everyday devices like laptops, tablets and even electric toothbrushes, these batteries can catch fire if they overheat or are damaged.
Last July, panic erupted on an American Airlines flight from San Francisco to Miami after a laptop battery in a carry-on bag ignited.
“It was absolute chaos. It truly felt like every man for themselves. And it was terrifying,” said Shilpa Patel, a passenger on the flight. “I don’t know if we’re going to explode. All I know is I need to get out and I need to survive.”
FAA data shows that lithium battery fires on U.S. flights have risen 388% since 2015, now occurring nearly twice a week.
“Any fire at 30,000 feet is unacceptable,” said David Wroth of UL Standards & Engagement, a safety research organization.
A survey of more than 800 flight attendants conducted by UL found that 87% are concerned about lithium battery risks on airplanes, and more than a third believe airlines should do more to ensure passenger safety. While the FAA requires airlines to include general safety information in preflight announcements, those warnings often don’t address the specific risk of battery fires.
“It’s a balance we probably need to do a better job striking with the airlines,” said Ben Supko, who oversees hazardous materials safety for the FAA. “Passengers don’t fully understand how serious the risk is.”
Supko said passengers need to monitor devices during a flight and immediately notifying the crew if a device becomes warm, discolors, or bulges. Passengers are also warned not to pack lithium batteries in checked luggage, as fires in the cargo hold are harder to extinguish.
“When you don’t know what’s going to happen, you act erratically,” said Patel. “It costs us nothing just to say, ‘Hey, the reason why we’re so serious about this is because it could be really dangerous. It could catch fire.'”
The UL survey also found that one in four passengers admits to packing lithium batteries in their checked bags. It is a dangerous practice for one reason in particular: It would be even harder to put out a fire in the plane’s cargo hold.
CBS News reached out to American Airlines regarding the incident at the San Francisco airport and potential updates to its safety announcements. The airline did not address the question directly but stated that its flight attendants receive thorough and ongoing training to handle emergencies onboard.
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