Worried About Mortgage Rates? Control What You Can.

It’s not surprising that mortgage interest rates are top of mind for many potential buyers. Some continue to tell us that they are waiting for interest rates to go back to 3% before buying. Others say they are waiting to begin their search when the rate reaches a specific number. (Which could change the next day.)

In our blog last week, we wrote about the reasons rates are a little jumpy right now.

So, instead of throwing up your hands over interest rates and deciding to continue to rent giving your landlord what amounts to a mortgage payment every month or staying in a house that your family outgrew five years ago, a better idea might be to start focusing on the factors you can control that will lead to a new home.

Your Credit Score

Credit scores can play a big role in your mortgage rate. And the difference of just a few points can make a significant impact on your monthly payment.

As an article from Bankrate explains: “Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”

With rates where they are today, maintaining a good credit score is one of the keys to getting the best rate possible. To find out where your credit score stands and what you can do to give it a boost, reach out to a reputable mortgage lender. If you don’t know one, we can recommend several who we work with on a regular basis.

Your Loan Type

There are many types of loans, and each one offers different terms for qualified buyers. 

The Consumer Financial Protection Bureau (CFPB) says: “There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans. Lenders decide which products to offer, and loan types have different eligibility requirements. Rates can be significantly different depending on what loan type you choose. Talking to multiple lenders can help you better understand all of the options available to you.”

Your Loan Term

Just like with loan types, you have options when it comes to terms, or the length of your loan.

As Freddie Mac advises: “When choosing the right home loan for you, it’s important to consider the term, which is the length of time it will take you to repay your loan before you fully own your home. Your loan term will affect your interest rate, monthly payment, and the total amount of interest you will pay over the life of the loan.”

Lenders typically offer mortgages in 15, 20, and 30-year terms, and which you go with has a direct impact on your rate. Talk to your lender about which one is right for your situation. 

Bottom Line

You can’t control what happens in the broader economy or when mortgage rates will come down. But there are actions you can take that could help set you up for success.

Buying a home is the biggest financial decision most of us make. Don’t depend on the opinions of amateurs whether your Uncle Bob, who bought a house 20 years ago, or a so called “financial expert” on your favorite cable news channel who will give you advice about mortgage rates one day and the best bargain vacations the next.

This is serious business and if you’re serious about buying a home for the first time or making the change you know you need to, you need to work with professionals.

Let’s connect and we can give you the most up to date perspective on where the market is in terms of prices and put you in touch with experienced mortgage lenders.

Buying a home may not be as difficult as you think…

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We’re excited to tell you that we’ve been recognized once again as Top Agents on Zillow! The designation recognizes our commitment to the highest level of customer service in helping our clients find the homes they need.

Mari and Hank

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.