By Chris Smith
September 27, 2016
There are many things that drive mortgage rates available to Buyers. Some things are out of your control: National Employment Patterns, the Stock Market, actions of the Federal Reserve, natural disasters and geopolitical or global events.
Let’s focus on the things you CAN control to get the mortgage rate that fits your budget and allows you to get into that home you want.
The better your credit score the lower your interest rate. Having a high credit score makes you a more favorable borrower in the eyes of the lender. First, find out what your credit score is. Then try improving your credit score before you start the loan application process. Talk to your loan consultant on ways you can improve your score.
There are a lot of low down payment options for borrowers. What you may not know is that if you increase your down payment on the home you are buying you can secure a lower interest rate. This can ultimately save you more money over the life of the loan.
Size of the Loan
The amount of money you borrow can impact the interest rate. A larger loan amount will usually have a higher interest rate. The reason for this is because paying back a larger loan amount will likely take long and there is more at stake for the lending organization.
Type of Property and Occupancy
Loan pricing is slightly lower for single family homes compared to condominiums. Owner occupied loans also have lower rates than non-owner or investment properties.
The best way to understand all your options regarding interest rates is to talk to a loan consultant BEFORE you start your home search.
About the Author: Chris Smith is a Senior Mortgage Consultant (NMLS #253394) with New American Funding. For more information about home financing you may contact him at 714.401.5921.