If you’re trying to find the best possible mortgage rate, compare and research your options carefully. Similarly to when comparison-shopping for products or services, the more you know about the choices available to you, the better your decision will be.
However, mortgage rates are more complicated than other types of comparison shopping. With multiple factors determining interest rates, here are the most important things to know:
Factors affecting mortgage rates
Your credit score is one major factor in determining your loan rates. The higher your score, the lower your risk is considered by the lender, and the lower your payment rate. Other financial details like debt-to-income ratio are also on the table.
The type of mortgage you choose also impacts your rates. A fixed-rate mortgage will have a higher interest rate overall, but will never change. An adjustable rate mortgage may begin with a low rate, but increase over the life of the loan.
Down payment amount can also affect mortgage interest rates. Often, a larger down payment might qualify you for a lower rate.
Market factors
Unfortunately, it’s not possible to control every factor in determining mortgage rates. The national and global economies and the Federal Reserve all affect the mortgage market and interest rates. Mortgage lenders take these “big picture” factors into account with your personal financials when offering you a rate.
How to find the best mortgage rate
It can seem overwhelming to check interest rates while searching for a mortgage. Unfortunately, it can require some time to learn the best way to do it.
Comparing loan rates with lenders directly is the quickest and most important step in the house purchasing process. Even small differences in rates of six figures will accumulate dramatically over a 30-year mortgage.
Knowing what to expect for a monthly mortgage payment is crucial to budgeting, and understanding the ins-and-outs of how an interest rate is calculated will help. Consult a financial advisor or research online to find the most pertinent information when searching for your perfect mortgage loan.
About the Author
Cheryl Cook
Hi, I'm CHERYL COOK and I'd love to assist you. Whether you're looking for advice and guidance to prepare your property for sale or in the research phase of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.
I am a dedicated full-time Broker Associate with eXp Realty. I obtained my New Jersey Real Estate License in 2003 and mentored under seasoned Real Estate professionals who taught and inspired me with their experiences. As a member of the National, State, and North Central Jersey Association of REALTORS® I have achieved the Accredited Buyer’s Representative (ABR®), and Certified Residential Specialist (CRS) designations as well as Short Sale and Foreclosure Resource (SFR®) certification. I specialize in residential sales in Somerset, Union, Middlesex and Essex Counties.
Thank you visiting my website. I look forward to hearing from you.
