News

Tips for securing a lower mortgage rate this spring

By shopping around for lenders and purchasing mortgage points, homebuyers can secure a lower rate this spring.

Andrew Merry/Getty Images

Homebuyers hopeful that interest rates would be cut and that mortgage interest rate cuts would soon follow will have to wait a bit longer for relief. Or so it seems. After months of encouraging inflation news, the most recent report showed it increasing again in February. And anticipated rate cuts may now not come until June (or later). Last week, one Fed official even said that there may not be any rate cuts at all in 2024, which would leave mortgage rates stuck at their highest point in decades.

While this can be discouraging news for buyers (and current owners looking to refinance), it doesn’t mean that you need to get stuck with today’s average rate, either (6.95% for 30-year mortgages as of April 8). There are multiple ways to get a rate lower than that right now. Below, we’ll break down five ways to get a lower mortgage rate this spring.

Start by shopping for rates and lenders online today.

How to get a lower mortgage rate this spring

Here are five effective ways to get a below-average mortgage rate this season.

Boost your credit score

The best mortgage rates and terms will always go to the borrowers with the highest credit scores, so if your credit profile needs improving, now is the time to do so. While a high credit score won’t result in the mortgage rates of 2021 returning, it can help you get the lowest rate available right now, and that can result in major savings when spread over the traditional 30-year mortgage term.

See what mortgage rate you could qualify for here now.

Shop for lenders

Just like you wouldn’t purchase the first car you test-drove, you shouldn’t necessarily lock in the first mortgage rate offer you get from a lender. Instead, shop around and compare rates and options from multiple banks — and be sure to look at any fees or closing costs that are tacked on. While a lower mortgage interest rate is ideal, excessive fees could quickly eat away at the savings received with the lower rate.

Consider a shorter mortgage term

Today’s 30-year mortgage loan rate is 6.95% — but a mortgage term at half that time frame comes with a rate of 6.34% now. While that may not be a dramatic difference, every percentage point (and a quarter of a percentage point) can help. That said, a shorter mortgage term will result in a compressed time frame, leading to bigger mortgage payments, thus negating the benefit of the lower rate for many borrowers.

Get an adjustable-rate mortgage

An adjustable-rate mortgage is exactly what its name implies: the rate will adjust over time. This can result in a lower mortgage rate to start (usually for a few years) before re-adjusting to a higher one after that period has ended. That later adjustment could come, however, at a time when the rate climate has stabilized, allowing buyers to get the benefit of that lower rate for a few years before refinancing into a fixed, lower rate in the future.

Purchase mortgage points

By purchasing mortgage points from your lender, you’ll be able to secure a lower rate than you otherwise would have gotten on your own. The cost of these points can then usually be rolled into your overall mortgage loan or paid during the closing process. And while purchasing mortgage points won’t allow you to buy yourself a 3% rate, it can make a major difference by knocking off half a percentage point or slightly more from the rate you would have been offered without it.

Learn more about your mortgage rate options here now.

The bottom line

While the historically low mortgage interest rates of recent years are unlikely to return anytime soon, that doesn’t mean that buyers have to get stuck with a 7% rate either. By boosting their credit score, shopping for lenders, considering a shorter mortgage term, pursuing an adjustable-rate mortgage and purchasing mortgage points — or by combining multiple strategies — buyers can secure a below-average rate right now. Just be sure to carefully weigh the pros and cons of each option before acting, as some may be more costly than others.

Matt Richardson

Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.

Intellectuals Insider

+ posts

Check Out Also: The Rise of Super Strict Schools in England: Where You Can Hear a Pin Drop

News

Is now the right time to invest in gold as prices have cooled?

Now may be the time to buy gold following a recent lull in its price.

Getty Images/iStockphoto

The price of gold has climbed to record highs recently and has remained strong through much of April. And, that growth continued until the precious metal traded at around $2,390 per ounce on April 19, 2024. But since, growth in the price of the precious metal has cooled, with gold’s price now hovering around $2,300 per ounce.

This lull in gold’s price may represent an investment opportunity.

In general, investing is centered around buying assets when prices are low and selling them when prices are high – generating a profit on the difference between the two. So, considering the declines in gold’s price over the past few days, now may be the time to make your investment. But is buying gold during this lull in prices really a good idea?

Compare your gold investment options among leading brokers now.

Gold prices have cooled. Should you buy in now?

With gold’s price down from recent highs, you may be wondering if now is the right time to buy in. There are several reasons the dip in gold’s price may represent an opportunity to buy. Here are some of the biggest:

Prices may rise again

If looking at a gold price chart shows anything for certain, it shows that changes in the overall growth of the medal come in fits and spurts. Periods of price growth are typically followed by periods of declines and vice versa.

But with inflation rising in recent months – and with gold’s reputation as a safe-haven asset that can hedge against inflation – it only makes sense that the price of the precious metal will eventually start to head up again in the future. While attempting to time that directional change may be tricky, buying the precious metal while the price is down gives you the opportunity to take advantage of any upward movement that may be ahead.

Add gold to your portfolio now before prices have a chance to rise.

You may be able to make a quick profit

Gold isn’t known as an asset in which you can earn a quick return, but in today’s market, that may be the case. Don’t forget that in January, gold was trading at just $2,000 per ounce. And, by mid-April, the commodity’s price had climbed to around $2,400 per ounce. That’s about 20% growth in a matter of months, much of which happened since March 1 – an impressive climb for any investment asset.

Perhaps more importantly, gold’s price growth through the beginning of 2024 shows that the commodity doesn’t have to be a buy and hold style investment that you keep in a safety deposit box or precious metal depository for years to come. There’s also the possibility that the commodity’s price could climb further ahead, making it a compelling way to potentially generate a quick profit.

There are other benefits of investing in gold

There are other benefits of investing in gold that have little to do with the price growth seen thus far in 2024 – or the lull in prices seen over the past couple of days. Those benefits include:

Inflation protection: Gold has long been considered an inflation hedge, and for good reason. When inflation drives the prices of consumer goods and services up – and the value of the dollar down – gold’s price tends to rise. So, it could be used to maintain the value of your portfolio during inflationary economic conditions. That’s important in today’s economic environment as stubborn inflation continues to weigh on the value of the dollar.
Portfolio diversification: Gold’s price doesn’t always move in the same pattern that bonds or stocks do. So, mixing a reasonable amount of gold into your portfolio (up to 10% of your portfolio assets) as a diversifier could protect you from losses should one or more of your traditional portfolio assets fall in value. “If you have less than 5% – 10% of your net worth in commodities & FX (forex), you should absolutely consider adding exposure to gold and other precious metals,” says Vijay Marolia, money manager and managing partner at the wealth management firm, Regal Point Capital.

The bottom line

Gold’s price has fallen from recent highs – which may represent an opportunity to tap into growth ahead. However, gold isn’t simply a “buy while it’s low and sell while it’s a high” kind of investment opportunity. The commodity can also protect your portfolio from the stubborn inflation we’ve seen thus far in 2024 while acting as a diversification tool that could increase your risk-adjusted portfolio returns. So, consider adding gold to your portfolio today while it has the potential to grow in value.

Joshua Rodriguez

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he’s not working, he enjoys time with his wife, two kids, two dogs and two ducks.