Four Things That Help Determine Your Mortgage Rate

Four Things That Help Determine Your Mortgage Rate

If you’re looking to buy a home, you probably want to secure the lowest interest rate possible for your home loan. Over the last couple of years, that was easier to do as the housing market saw record-low mortgage rates, but this year rates have risen dramatically.

If you’re looking for ways to combat today’s higher rates and lock in the lowest one you can, here are a few factors to focus on. Since approval opportunities can vary, connect with a trusted lender for customized advice.

Your Credit Score

Credit scores can play a big role in your mortgage rate. Freddie Mac explains:

When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.”

That’s why it’s important to maintain a good credit score. If you want to focus on improving your score, your trusted advisor can give you expert advice to help.

Your Loan Type

There are many types of loans, each offering different terms for qualified buyers. The Consumer Financial Protection Bureau (CFPB) says:

There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans. Lenders decide which products to offer, and loan types have different eligibility requirements. Rates can be significantly different depending on what loan type you choose.”

When working with your real estate advisor, make sure you find out what’s available in your area and which types of loans you may qualify for.

Your Loan Term

Another factor to consider is the term of your loan. Just like with location and loan types, you have options. Freddie Mac says:

When choosing the right home loan for you, it’s important to consider the loan term, which is the length of time it will take you to repay your loan before you fully own your home. Your loan term will affect your interest rate, monthly payment, and the total amount of interest you will pay over the life of the loan.”

Depending on your situation, the length of your loan can also change your mortgage rate.

Your Down Payment

If you’re a current homeowner looking to sell and make a move, you can use the home equity you’ve built over time toward the down payment on your next home. The CFPB explains:

In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So if you can comfortably put 20 percent or more down, do it—you’ll usually get a lower interest rate.”

To learn more, connect with a lender to find out the difference a higher down payment can make for your new mortgage.

Bottom Line

These are just few factors that can help determine your mortgage rate if you’re buying a home. The best thing you can do is have a team of professionals on your side. Connect with a local real estate professional and a trusted lender so you have the expert advice you need in each step of the process.

 

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. The Home Run Team Ltd. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. The Home Run Team Ltd. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Recent Blog Posts

Why Homeowners Feel Thankful for Their Homes [INFOGRAPHIC]

Here are three reasons why homeowners feel thankful for their homes.

Why Homeowners Are Thankful They Own

Countless people have set out on the exciting journey of homeownership. Ask around and you’ll find the vast majority are thankful they took the leap and bought a home.… Read more

Home Prices Still Growing – Just at a More Normal Pace

Home price appreciation is returning to normal seasonality and that’s a good thing.

Are There Actually More Homes for Sale Right Now?

If you’re looking to make a move, you want to be sure you have the latest information on the housing market.

Is Your House the Top Thing on a Buyer’s Wish List this Holiday Season?

There are plenty of good reasons to put your house on the market during the holiday season.

2024 Housing Market Forecast [INFOGRAPHIC]

Thinking of buying or selling a house and wondering what the new year holds for the housing market?

People Are Still Moving, Even with Today’s Affordability Challenges

You might think there aren’t many people buying or selling homes right now since affordability is tighter than it’s been in quite some time, but that’s not the case.

The Latest 2024 Housing Market Forecast

The new year is right around the corner, and you might be wondering if 2024 will be the right time to buy or sell a home.

These Top Cities Show Home Prices Are Still Climbing

If you delayed moving because you were concerned home prices would drop, don't worry – the numbers show they're going up nationally.

Work With Us

We're fortunate to be able to do what we want to do every day, and what we want to do is help clients live a better, more secure life. Whether you're buying a home, looking to sell or relocate, or are an investor, we can help you. No agents will work harder for you, because to us, going to bat for you, isn't work. That's just what you do when you're a team.

Follow Me On Instagram