Mortgage rates are a large element in the home buying process. They affect the size of your monthly mortgage payment, as well as the amount of interest you’ll pay. A low rate can mean lower payments, while a high rate can cost you a lot of money over the life of your loan.
Your credit score plays a big role in determining your interest rate. Many lenders use a FICO score to calculate your rate. If your score is 700 or above, you can expect a better interest rate.
Your down payment is also a factor. Having a larger down payment can help you qualify for a lower rate. You may want to consider a down payment of 20% or more.
Homebuyers can find out what the current mortgage rates are by visiting a lender’s website. Lenders typically update their rates once a day Monday through Friday. Some websites offer a mortgage rate quote, which provides an estimated annual percentage rate and loan origination fees.
These estimates are based on information you provide. Your down payment, loan program, and location are all factors that will affect your rate.
Interest rates are always fluctuating. It’s best to shop around and compare different companies’ offers. Even a few fractions of a percentage can make a significant difference in the total interest paid over the life of your loan.
The federal funds rate is a short-term rate set by the Federal Reserve. Its goal is to keep inflation at bay. Higher inflation means higher mortgage rates.
