Mortgage Rates For January 12, 2024: Why Should You Pre-Qualify for a Mortgage?
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If you’re a first-time homebuyer ready to start looking for your next home, consider pre-qualifying for a mortgage. The mortgage pre-qualification process enables you to determine the buying power you have, helping you narrow your field of search. Let’s take a look at what a pre-qualification is, how it differs from a pre-approval, and why you’ll need that as you look at homes and consider average daily mortgage interest rates.
What is mortgage pre-qualification?
Mortgage pre-qualification comes from a lender. The pre-qualification provides you with a monthly payment amount, the total amount of the loan, and the interest rate you qualify for.
The pre-qualification itself is represented by a letter from the lender. In a competitive market, pre-qualified buyers are more likely to get the home they want, and it’s seen as an indication about being serious and ready to buy.
Today’s 30-year mortgage interest rates
The average daily mortgage interest rate for Friday, January 12, 2024 is 6.69% for a 30 year fixed rate. The rate fell 0.03% from the last update on January 10, 2024 and 0.40% from December 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
Today’s 15-year mortgage interest rates
The average daily mortgage interest rate for Friday, January 12, 2024 is 5.95% for a 15 year fixed rate. The rate fell 0.05% from the last update on January 10, 2024 and 0.55% from December 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
What’s the difference between mortgage pre-qualification and mortgage pre-approval?
A mortgage pre-qualification is helpful, but it doesn’t require a hard credit check. Think of it like an estimate showing how much you’ll be allowed to borrow. The lender often doesn’t ask for an extensive amount of documentation when issuing a pre-qualification.
A pre-approval is more like an authorization. This process involves an actual application, and will require you to submit your proof of income, bank statements, tax returns, and more. This also results in a hard credit check – which is something you may want to plan for when it’s time to buy, especially if you’re hovering around a milestone credit score.
Pre-approvals also expire, often within 30-60 days. Because of this and the hard credit check, many buyers begin looking with a pre-qualification in hand, but wait until they’re more serious about buying before proceeding with a pre-approval. When going for a pre-qualification or pre-approval with a lender, make sure they know the difference – and your real estate agent as well.
Both pre-approvals and pre-qualifications do speed up the process and let the seller know you are serious about buying a home.
