If you’re looking to buy a home but are concerned about rising mortgage rates, hopes of homeownership are not lost!
“Remember, the super low interest rates of a year ago were an anomaly,”says Julia Dagistanli, Sales Associate at ERA Justin Realty, “What we are seeing now is a return to normal.”
There are ways to combat today’s higher rates and lock in the lowest one you can. An experienced lender can help you find the best options. Here are a few factors to focus on:
Your Credit Score
Credit scores can play a big role in the amount of your mortgage rate. “Your score essentially tells lenders whether you can be trusted with their money,” says Jennifer Darby Metzger, Broker/Owner of ERA Justin Realty, “The higher your score, the safer it is to bet on your ability to pay your loan back. A lower interest rate could be your reward for always paying your credit card bills on time.”
If you need help improving your score, a trusted financial advisor can advise you.
Your Loan Type
Mortgages are not one size fits all. There are various types, offering different terms for different buyers.
“There are FHA loans for first time homebuyers. There are VA loans for veterans,” says Dagistanli. “Talk to your lender. You may be eligible for a special rate or a lower down payment.”
Your Loan Term
Another factor to consider is the term of your loan, which is how long you have to repay it in full. “A 30 year mortgage is the one you hear about the most,” says Darby Metzger, “But a 15, 20 or 25 year term may be better for you. Plus a shorter term could add up to less money paid in interest over the life of your loan.”
Your Down Payment
If you are a current homeowner looking to sell, you can use the equity you have in your current home to buy your next one.The more money you put down, the smaller your mortgage, the more you save in interest. “If you can put down more than 20%, a lender sees you as a safe bet,” says Dagistanli. “And you will usually get a lower interest rate.”
Knowing what you can and can not control is key to obtaining the best mortgage rate. The best thing to do is have a team of professionals at your side. Contact Julia Dagistanli or any of the experienced agents at ERA Justin by calling 201-935-7500.