If you’re looking to buy a home in Central CA, you probably want to secure the lowest interest rate possible for your home loan. Over the last couple of years, that was easier to do as the housing market saw record-low mortgage rates, but this year mortgage rates have risen drastically.
If you’re looking for ways to combat today’s higher rates and lock in the lowest one you can, here are a few factors to focus on. Since approval opportunities can vary, connect with a trusted lender for customized advice. Contact us if you need a recommendation for a trusted lender.
Your Credit Score
Credit scores can play a big role in your mortgage rate. Freddie Mac explains:
“When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.”
Your Loan Type
There are many types of loans, each offering 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.”
When working with your Central CA real estate advisor, make sure you find out what’s available in your area and which types of loans you may qualify for.
Your Loan Term
Another factor to consider is the term of your loan. Just like with location and loan types, you have options. Freddie Mac says:
“When choosing the right home loan for you, it’s important to consider the loan 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.”
Depending on your situation, the length of your loan can also change your mortgage rate.
Your Down Payment
If you’re a current homeowner looking to sell and make a move, you can use the home equity you’ve built over time toward the down payment on your next home. The CFPB explains:
“In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So, if you can comfortably put 20 percent or more down, do it—you’ll usually get a lower interest rate.”
These are just few factors that can help determine your mortgage rate if you’re buying a home. The best thing you can do is have a team of professionals on your side. Give our Oak Shores Realty team a call today! Let’s discuss your goals, your timeline, and a plan of action, to make those goals a reality as soon as possible.
Grace Borzini
Your Local Lake Nacimiento Real Estate Expert
Oak Shores Realty
Oak Shores Real Estate
View Oak Shores Listings
Visit My Website
Email Me