4 Things That Impact Your Mortgage Rate

Home buying has never been more competitive. With mortgage rates on the rise this year, buyers are being forced to look for cheaper options outside their desired area of residence or spend much higher amounts than they had planned if financing is not an option at all due in part from rising interest payments over time that could have been avoided with better planning before hand!

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.”

That’s why it’s important to maintain a good credit score. If you want to focus on improving your score, your trusted advisor can give you expert advice to help.

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 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.”

To learn more, connect with a lender to find out the difference a higher down payment can make for your new mortgage.

Bottom Line

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. Connect with a local real estate professional and a trusted lender so you have the expert advice you need in each step of the process.

19 Properties
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4
Beds
1F21/2
Baths
2,599
Sq.Ft.
1912
Year Built
29
Days on Site
24024390
MLS
5
Beds
3F21/2
Baths
5,424
Sq.Ft.
1997
Year Built
17
Days on Site
24025869
MLS
Pending
14195 Georgian Bay Dr Holland,  MI 49424
$600,000
Neighborhood: Macatawa Legends Golf Course
4
Beds
3
Baths
2,938
Sq.Ft.
2007
Year Built
86
Days on Site
24013508
MLS
Pending
7250 W Garbow Rd Middleville,  MI 49333
3
Beds
2
Baths
2,521
Sq.Ft.
1990
Year Built
63
Days on Site
24016785
MLS
Pending
547 Robbins Rd Grand Haven,  MI 49417
3
Beds
1
Baths
1,232
Sq.Ft.
1962
Year Built
45
Days on Site
24020883
MLS
4
Beds
2
Baths
1,824
Sq.Ft.
1954
Year Built
30
Days on Site
24024117
MLS
Pending
3015 Buchanan Ave SW Grand Rapids,  MI 49548
3
Beds
2
Baths
1,214
Sq.Ft.
1949
Year Built
158
Days on Site
24002238
MLS
Pending
222 W Michigan Ave Fremont,  MI 49412
3
Beds
1
Baths
1,442
Sq.Ft.
1953
Year Built
57
Days on Site
24018464
MLS
3
Beds
3
Baths
2,932
Sq.Ft.
1973
Year Built
3
Days on Site
24029474
MLS
Pending
1734 Manitou Ln Middleville,  MI 49333
1
Beds
1
Baths
1,035
Sq.Ft.
1940
Year Built
14
Days on Site
24027413
MLS
Pending
730 S Jefferson St Hastings,  MI 49058
3
Beds
1F11/2
Baths
1,420
Sq.Ft.
1900
Year Built
28
Days on Site
24024656
MLS
Pending
20019 Northrup Dr Howard City,  MI 49329
2
Beds
2
Baths
1,144
Sq.Ft.
1988
Year Built
56
Days on Site
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