Factors that Affect Mortgage Rates?
You want to get your mortgage rate as low as possible. With the constant market changes, however, it’s important to understand exactly what determines it. Below are a few key factors that help influence your mortgage rate.
Credit Score and Other Finances
Your personal finances might be one of the most important things affecting your mortgage rate. Your lender will investigate your risk of default and calculate your debt-to-income ratio. The most important one they’ll look at is your credit score. Consumers with higher scores will have lower rates than those with low credit scores.
A larger down payment typically results in a lower interest rate. It also lowers the risk to the lender that you will default.
Several factors of your loan, including the amount, type and term, all play into your mortgage rate. Extremely small or large loans may have higher rates. The duration you have to pay your loan, or term, will also help. Short-term loans have lower rates, but the monthly payment may be higher.
Type of Interest Rate
Interest rates can either be fixed, which means they don’t change, or adjustable, which will change after a set period based on the market. Adjustable rates will initially offer a lower rate, but they are a bit more unpredictable in that they could hike up depending on how the market behaves.
Secure Your Mortgage Rate with Butler Mortgage
To navigate the housing market and secure the mortgage rate you need, rely on the mortgage professionals at Butler Mortgage. We’ve been working with buyers in the Central Florida area for more than 25 years. Let us help find the right loan solution for you by calling 407-931-3800 or by filling out our free consultation form online.