Things That Can Affect Your Mortgage Interest Rate
FHA Home Loan Interest Rates: Shop Around
In recent years, government studies have shown that fewer than half of all American consumers shop around for mortgage rates. If you don’t shop around, you won’t get more competitive interest rates.
FHA Home Loan Interest Rates: Check Your Credit Scores
Interest rates advertised online and elsewhere don’t reflect the lender’s decisions to offer a higher or lower rate to a potential borrower based on credit scores. Your FICO scores will definitely affect the rate you are offered so it’s best to work on your payment history, lower your debt-to-income ratio, and take other steps to improve your credit before applying for a mortgage.
Market Fluctuations
Market activity, breaking news, global headlines (especially economic headlines) and investor behavior can all influence the rates moving up or down. These things do not CONTROL mortgage loan interest rates, but they do INFLUENCE them. The rates you see online today might not be the rates you get offered tomorrow.
Borrower Choices
Borrowers may, depending on the nature of the transaction and other factors, have the option to buy down interest rates up front, saving money over the lifetime of the mortgage loan. Borrowers who have a goal of saving more up front and avoiding out-of-pocket expenses may choose not to pay discount points, but paying down an interest rate is one way you can affect the rate you are offered.
Loan Choices
The type of mortgage loan you choose can also affect the interest rate you are offered; borrowers who choose an adjustable rate mortgage loan may be offered a lower introductory interest rate as an incentive to try an Adjustable Rate Mortgage loan to buy real estate. You can refinance later into a fixed-rate mortgage and avoid rate changes, but it is best to decide upon a strategy for your mortgage long-term if you want to do this.
Never apply for an adjustable rate mortgage without a plan to manage or avoid the future rate adjustments; know what to expect and how you will deal with such loans up front for best results.
------------------------------
RELATED VIDEOS:
Consider the Benefits and Risks of a Joint Loan
Borrowers Should Know About the Origination Fee
Everyone Needs to Pay Their Property Tax
Do you know what's on your credit report?
Learn what your score means.