Current Mortgage Loan Rates May 2022

What is a mortgage rate?

A mortgage rate is the annual interest that a homeowner owes on their total mortgage loan balance. Put simply, it reflects how much the borrower pays to take out their mortgage loan. 

A mortgage is a loan that is secured by property that is being purchased. In the event the borrower can’t repay the mortgage, the lender can use the underlying property to try and recoup the remaining balance on the mortgage. 

Buying a home is generally the largest purchase that most people make. Understanding mortgage loans is critical. Getting the right mortgage for your situation can significantly impact your overall financial situation and can help you make the home of your dreams an affordable reality.

Today's Current Mortgage Interest Rates

While mortgage lenders’ requirements have grown significantly stricter in recent years, the COVID-19 pandemic has led to extremely low-interest rates on mortgages. Even a fraction of a percentage point can lead to thousands or tens of thousands of dollars in savings over the term of a mortgage.

Mortgage rates can vary widely depending on various criteria, such as your credit history and the value of your new home, along with market conditions.

Buying a House in 2022

Even under normal conditions, buying a house presents challenges of one sort of another for buyers. Buying a house in 2022 comes with a number of challenges.

One factor has been a dwindling supply of homes in some parts of the country. This stems from a combination of some sellers taking their home off the market and increased demand for homes in many areas. In some cases, sellers may have decided that this isn’t a good time to move, or perhaps they’ve encountered a financial situation that has led to this decision. Due to the pandemic, many families have decided to move out of congested urban areas and into suburban areas. In many cases, the lower supply and increased demand have resulted in higher prices and stiff competition.

Mortgage Interest Rates & COVID-19

The economic fallout from COVID-19 has impacted the mortgage market in the form of stricter requirements from many lenders. Perhaps having learned from the financial crisis of 2008, many lenders have tightened their lending standards. 

These more stringent requirements vary by lender, but some examples are:

• Some lenders have raised their minimum credit scores in general, or at least require to qualify for more preferential interest rates and mortgage terms. 
• Some lenders have increased the down payment amount required to qualify for a loan.
• In some cases, mortgages that had previously been pre-approved are subject to a re-verification process prior to the finalization of the loan.
• Even government-backed loans through the FHA and VA have been impacted by some lenders’ stricter minimum requirements to obtain these loans. 

The bottom line for home buyers is that these tougher requirements may require more shopping to obtain an affordable mortgage. 

How to Choose the Right Mortgage Lender

Choosing the right lender takes a fair amount of research and requires a thorough review of your situation before you even start your search. For example, if you are a first-time buyer, some lenders might be better than others for your situation. Other factors that can help determine the right lender for your situation might include:

• Do you have a high credit score, or are there issues here?
• Are you looking for a 30-year mortgage or perhaps one with a 15-year term? 
• Are you a