What Can Affect Your Mortgage Rate?
You see advertisements for mortgage rates all over the media and internet. But how can you be sure that you’re getting the best rate possible? Even if you compare rates, they probably aren’t realistic. Here are some factors to take into consideration.
- Economy – The global economy drives all interest rates, including mortgage rates
- Property location – Lender costs can go up or down depending on state laws
- Lender pipeline – How much business a lender is currently processing
- Property type – Single family, multi-family, condo, mobile, co-op, etc.
- Loan-to-value – Lower values get a better rate
- Home use – Is this home being used for personal use, rental, or vacation?
- Credit score – The higher the score, the better the rate
- Points – Overall, the higher the costs, the lower the rate
- Loan features – Term, documentation, rate adjustment, interest-only payments, etc.
- Loan amount – If the loan amount is very high or very low, this can mean higher rates
Mortgage Rates Always Change
It’s true. In fact, rates can change in minutes! Even politics can affect the rate. As an example, when the President disbanded his business council, it sent rates into a tailspin within 20 minutes! So that means the rate you were quoted before and after that situation would have been much different.
The good news is that current mortgage rates are as low as they've been in 2017. But home prices are soaring in much of the US. To get a low rate and make your home as affordable as possible, you need to get several custom quotes from competing mortgage lenders.
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