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:
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.
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.
It can seem overwhelming to check interest rates while searching for a mortgage. Give yourself 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. We can help by providing contacts for trusted local lenders!
We are Todd and Lisa McLain and we would love to serve you throughout your home buying/selling experience. Whether you're in the research phase of your real estate search or you know exactly what you're looking for, you'll benefit from having real estate professionals with over 20 years of experience in the Pikes Peak region by your side. We'd be honored to put our real estate experience to work for you!
