CBS News
Shopping for mortgage interest rates now? Look for these 3 things
Getty Images
If you’re a homebuyer who has been patiently waiting for mortgage interest rates to fall — or a homeowner saddled with a high rate looking to refinance — the wait for relief may soon be over. The Federal Reserve is set to issue its first interest rate cut since 2020 this week and while that may not match up with a direct cut to mortgage rates, it will help move them in a downward direction. Combined with additional cuts to the federal funds rate likely for November, December and possibly even into 2025, both buyers and owners are now positioned to secure significant financial relief.
One of the best ways to find a lower mortgage interest rate is to shop around to compare rates and lenders. It’s easy to do so with rates listed both on lender websites and multiple offers listed in one location via online marketplaces. But when you’re shopping for mortgage interest rates it’s critical to know exactly what you’re looking at to accurately complete a lender comparison. So what should you be keeping an eye out for, specifically? Below, we’ll detail three things to look for when shopping for mortgage interest rates in today’s climate.
See what mortgage rate you’d be eligible for here now.
What to look for when shopping for mortgage interest rates
While the mortgage interest rates you see listed online now and later this week may appear low, there are some things you should check to help verify what’s listed. Specifically, look for:
Mortgage points
Mortgage points serve as a fee the borrower pays to the lender to secure a below-average interest rate. These can be pricey (often 1% of the total mortgage loan) but can still be advantageous in the right scenario. That said, some lenders may have already preemptively included mortgage points in the rate they list on their website, thus making their offers appear lower than they are. You’ll need to agree to pay these points to get that offer. So be sure to look for any fine print or disclosures listed when shopping around to determine if this is the case. If so, the rate without the points included could be significantly higher than what you see.
You can shop for rates and lenders in one spot online today.
Lender profile
Another factor to consider when shopping for mortgage interest rates is the presumed lender profile the bank has for those doing their research. In other words, the rate you see listed may be for those with the most attractive lender profile possible. If you don’t have a clean credit profile and a score in the 800 range, then, what you see being offered may not be what you can get. So don’t be surprised if the rate you’re ultimately offered is significantly higher than what you saw listed online. And don’t hesitate to start working on your credit now so that you can better position yourself to secure more attractive rates and terms
The time the rate was posted
Mortgage interest rates change daily, except for weekends and holidays, so it’s critical to monitor them often. When you do, however, try to see if you can determine the exact time the rate was posted. For example, if you check mortgage interest rates on Thursday before an interest rate decision is formally announced, you may not be seeing a rate reflective of that adjustment. In this case, waiting to see how that cut has reverberated through the market could be worthwhile (in which case rate offers on Friday may be timelier – and lower).
The bottom line
Mortgage rate shopping is a critical component of the homebuying process but it’s equally important to complete a thorough and accurate search. This means understanding that the rates you see listed may not be what you’re ultimately offered as the public-facing rates often account for mortgage points and a specific lender profile. They’re also reflective of a specific time and date. This may not apply to all lenders, especially in today’s dynamic rate climate. But it’s something to look for to improve your chances of securing the most cost-effective rate and term available, particularly now with rate cuts looming.
Have more mortgage rate questions? Learn more here.
In a move that has stunned Washington, President-elect Donald Trump is now urging Congress to eliminate the debt ceiling, dramatically shaking up talks among lawmakers, who are at an impasse over federal spending and government funding, which is scheduled to lapse this weekend.
While some on Capitol Hill have balked at Trump’s latest demand, the president-elect was unwavering on Thursday. He said he is determined to hold his position that lawmakers should both oppose any sweeping spending measure that includes “traps” from Democrats and abolish the debt limit before he takes office next year.
“Number one, the debt ceiling should be thrown out entirely,” Trump said in a phone interview. “Number two, a lot of the different things they thought they’d receive [in a recently proposed spending deal] are now going to be thrown out, 100%. And we’ll see what happens. We’ll see whether or not we have a closure during the Biden administration. But if it’s going to take place, it’s going to take place during Biden, not during Trump.”
Trump’s comments, which have sent negotiators in both parties back to the drawing board ahead of the expiration of government funding at 12:01 a.m. on Saturday, came a day after he called a bipartisan spending deal “ridiculous and extraordinarily expensive” and said that any legislation to extend the federal government’s funding should also include plans for “terminating or extending” the debt limit.
Still, Trump, who built a decades-long business career as a negotiator and dealmaker, appeared to leave room for House Speaker Mike Johnson and other top Republicans to find consensus on new options that he would find sufficient.
When asked how he would like to see this standoff end, Trump replied, “It’s going to end in a number of ways that would be very good.”
Trump said the discussions are ongoing and it is too soon for him to spell out more details on what the contours of a final agreement should be.
“We’ll see,” Trump said. “It’s too early.”
But Trump said he will continue to closely track how Democrats might seek to influence any revised deal and voiced displeasure at how the initial bipartisan deal had Democratic provisions.
“We caught them trying to lay traps. And I wasn’t going to stand for it,” he said. “There are not going to be any traps by the radical left, crazy Democrats.”
Tesla CEO Elon Musk, a billionaire who spent almost $300 million to back Trump and other Republican candidates in the November elections, also opposed the initial bipartisan spending deal, which he called “terrible.” When Johnson scrapped it, Musk wrote on X, “The voice of the people has triumphed!”
Trump’s focus on the debt ceiling, which caps the federal government’s borrowing authority, comes as he faces a showdown over the issue during the first year of his upcoming term. That prospect, several people close to Trump say, has drawn his attention because he wants to spend his time and political capital next year on other issues and would prefer Congress addresses it now.
While the current cap on federal borrowing is suspended until Jan. 1, 2025, the Treasury Department would be able to take steps to avoid default for a few months into next year. Nevertheless, the government could face an economically fraught default sometime early next year should the debt ceiling not be extended or addressed by Congress.
When asked Thursday about Trump’s call to address the debt limit, Rep. Hakeem Jeffries of New York, the House Democratic leader, said, “the debt-limit issue and discussion is premature at best.”
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
CBS News
CEO shooting suspect Luigi Mangione arrives in New York after waiving extradition in Pennsylvania
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Trump shakes up spending talks with call on Congress to eliminate debt ceiling
Video shows freight train derailing after crashing into tractor-trailer in Texas
CEO shooting suspect Luigi Mangione arrives in New York after waiving extradition in Pennsylvania
Trump shakes up spending talks with call on Congress to eliminate debt ceiling
Video shows freight train derailing after crashing into tractor-trailer in Texas