When it comes to choosing your mortgage, mortgage rates are only part of the equation. Home price, insurance, taxes, interest, and mortgage rates can all contribute to your monthly payment when buying a home. Today, we’ll be taking a look at how mortgage rates, and mortgages, really work.
What Factors Affect Mortgage Rate?
Mortgage rates are affected by a variety of factors, like credit score, down payment, property type, economic factors and more. Home buyers often start their search for mortgage rates online, where they can sometimes find rates that look too good to be true. Often times, they are. Advertised mortgage rates can show ideal or promotional rates that feature stipulations based on your credit score, down payment amount, length of mortgage and more. Qualifying for these rates can be a stretch for some borrowers, and additional fees can end up costing more in the long run.
Before comparing rates alone, it’s a good idea to understand how mortgages work. Home buyers can qualify for different types of loans, which have specific requirements for things like down payment, mortgage insurance and loan amount. Each of these things can contribute to your overall mortgage and rate. Having an experienced mortgage professional you trust can help save you time, stress and money.
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What Loan Program Should I Choose?
Selecting the best loan program that meets your needs can help save you thousands of dollars throughout the life of your loan. Knowing what percentage to put down, what type of loan to take, and how much to finance are all important factors that will affect you. With so many loan options, knowing and comparing the best one for you can be difficult to navigate. Searching online for the best mortgage and rate often results in spending time reading the fine print to see if you qualify. Not all loans and lenders are the same, and it can be stressful comparing all of your options. It helps to have a trusted mortgage lender on your side. Learn more about Loan Programs here.
What Happens Next?
You’ve found a great rate, but you haven’t been pre-approved/pre-qualified, so what next? Before you can start making offers on homes, you’ll need to fill out a loan application. These can usually be done online, and require your credit to be pulled. Once the information is verified, your mortgage lender will pre-approve you for a specific loan amount and rate. Credit score, income, and down payment will affect the amount you can qualify for and the interest. Learn more about Pre-Approval vs Pre-Qualification here.
Check out more articles on our Mortgage Resources page to stay informed with up-to-date information on the loan process, the types of loan programs and the do’s and don’ts of buying a home! Mortgages are so much more than a number, and it’s important to find a mortgage lender that will treat you like more than one, too.
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Why Home Loans Today?
At Home Loans Today, a proud division of FBC Mortgage, our key strategic approach is to prioritize customer value. Saving you money is our top priority – and our approach to lending shows that every day! Through efficient processes, proprietary technology, and aggressive pricing, we gain a competitive advantage over traditional mortgage companies.
We’ll help you navigate the mortgage process, and keep you updated at every step along the way so you know you’re taken care of. Buying a home is one of the most important financial decisions you will make. Understanding mortgages and the home buying process can help make it less stressful, and so can partnering with a mortgage lender you can trust. At Home Loans Today, we’re dedicated to helping our clients finance the home of their dream.
All information presented is for educational purposes only and not intended as financial advice.