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. 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.
Lana Harris is a Chicago native who is a second-generation real estate professional. She was introduced to real estate at a very young age while attending open houses with her mother who is a broker. She honed her skills assisting in property searches (back in the thick, Multiple Listing Service book days,) and using map reading skills to help plan property tour sequencing. Lana’s love of working with people and delivering strong customer service led her to the retail sector, where she developed her management skills at MC Sports, Ann Taylor, and Adidas. She and her husband moved to Utah in 2008 to enjoy the natural beauty of the mountains, and she began her real estate career here in 2015. Most recently, she was a VP of sales for a large team; she thrives on challenges and is determined to overcome obstacles to achieve results for her clients. Lana and her husband enjoy their three large dogs, skiing, camping and paddleboarding.
