Angela Mackinnon

CMI Mortgage #217909

What’s Ahead For Mortgage Rates This Week – October 20th, 2025

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The government has been facing a shutdown for the past 19 days with continued obstinacy from both parties, largely over healthcare subsidies.

As a result, there will be few major reports this week, the most notable being the Federal Reserve’s Beige Book, which indicates that the U.S. economy is once again showing signs of slowing.

Federal Reserve Chairman Jerome Powell also provided comments on the current inflation outlook, noting that multiple private and public data sources show inflation remains largely within projections. He added that the Fed will maintain its current monetary policy stance despite the ongoing government shutdow. There is still another planned rate cut potentially this year.

Federal Reserve Beige Book
Reports from across the U.S. indicate sluggish economic conditions in much of the country, with only three of the Federal Reserve’s 12 district banks reporting expanding activity in their regions, according to the Federal Reverse’s latest “beige book” report. The remaining nine districts reported either flat or contracting economic activity.

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.01% for this week, with the current rate at 5.52%
• 30-Yr FRM rates saw a decrease of -0.03% for this week, with the current rate at 6.27%

MND Rate Index
• 30-Yr FHA rates saw a decrease of -0.04% for this week. Current rates at 5.99%
• 30-Yr VA rates saw a decrease of -0.03% for this week. Current rates at 6.01%

Jobless Claims
Initial Claims were reported to be delayed until further notice.

What’s Ahead
There are some expectations that the shutdown could end next week, and the CPI and PPI reports (key inflation reports) may potentially be on the horizon.

The Role of Credit Inquiries in Mortgage Approval

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When preparing to apply for a mortgage, it is important to understand how credit inquiries can impact your chances of approval. Lenders use your credit report to assess risk, and every inquiry can play a role in how they view your financial stability. By knowing the difference between soft and hard inquiries, borrowers can make smarter decisions and protect their credit scores during the home buying process.

Soft vs. Hard Credit Inquiries
A soft credit inquiry occurs when a lender or other company checks your credit for informational purposes. Examples include checking your own credit report, pre-approval offers, or background checks from employers. Soft inquiries do not affect your credit score and are generally invisible to lenders considering your mortgage application.

A hard credit inquiry, on the other hand, happens when a lender reviews your credit as part of a formal loan application. These include mortgage applications, auto loans, or credit card applications. Hard inquiries can slightly reduce your credit score, especially if you have multiple inquiries within a short period.

How Multiple Inquiries Are Treated
Mortgage lenders understand that homebuyers often shop around for the best rates. Most credit scoring models treat multiple inquiries for the same type of loan within a certain period, usually 14 to 45 days, as a single inquiry. This allows you to compare mortgage offers without significant damage to your credit score, but timing is key.

Why Credit Inquiries Matter for Approval
Lenders use your credit report to determine your creditworthiness, risk level, and the terms they can offer. Too many hard inquiries may signal financial stress or overextension, which could impact your mortgage approval or result in higher interest rates. By strategically timing applications and avoiding unnecessary credit checks, you can strengthen your application.

Tips for Managing Credit Inquiries
Before applying for a mortgage, review your credit report for accuracy and resolve any errors. Limit new credit applications and coordinate rate shopping for mortgages within a short window to minimize score impact. Communicating with your lender about your plans and credit history can also help demonstrate responsible borrowing.

Understanding credit inquiries is an important part of the mortgage process. With careful planning, you can protect your credit score, secure favorable terms, and approach homeownership with confidence.

How Changing Jobs Affects Mortgage Approval

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Switching jobs can be an exciting step in your career, but for homebuyers, it can also raise questions about mortgage approval. Lenders evaluate income stability when considering a mortgage application, and a recent job change can influence how they view your ability to repay the loan. Understanding how a new position impacts your application can help you plan strategically and improve your chances of approval.

How Lenders Assess Employment Stability
Lenders want to ensure that borrowers have a reliable and consistent source of income. They typically look for at least two years of employment in the same field. Frequent job changes, gaps in employment, or a switch to a completely different industry may raise concerns about stability. However, a promotion, raise, or career advancement within the same field is often viewed positively.

Impact of Income Changes
A new job may come with higher or lower income. Lenders will typically verify your most recent pay stubs, W-2 forms, or tax returns to assess your earning power. If your income decreases, it may reduce the amount you can borrow. Conversely, a higher income can strengthen your application, but lenders may still require proof that the increase is sustainable.

Tips for Managing a Job Change During the Mortgage Process
If you are considering switching jobs while applying for a mortgage, timing is important. Avoid changing jobs immediately before or during the mortgage application if possible. If a change is unavoidable, be prepared to provide documentation that demonstrates your experience in the field, the new salary, and the stability of your new employer. Open communication with your lender can help ensure a smooth process.

When a Job Change Is Beneficial
A well-timed career move can actually improve your mortgage application. Promotions, raises, and lateral moves with increased responsibility in the same industry can demonstrate career growth and financial strength. The key is to show that the new position does not introduce risk to your ability to repay the loan.

By understanding how job changes affect mortgage approval and taking proactive steps, borrowers can navigate transitions confidently. Strategic planning and clear communication with your lender are essential to maintaining eligibility and securing favorable loan terms.

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