Buyers right now are taking advantage of historically low mortgage rates. The average rate on a 30-year loan declined to 3.55% this week, according to mortgage buyer Freddie Mac. The 15 Year Mortgage rate in the U.S is approximately 3.03%, compared to 3.07 % last week and 4.01% last year according to Freddie Mac. Since these are average market trends where this might not be an specific rate available to you.
If you are a buyer, it is best to shop around for the best mortgage rates available from different lenders. It is good to compare between 3-4 different lenders to make sure you are getting best possible interest rate.
There are a few things that lenders look at when determining your mortgage rate according to Freddie Mac.
- Credit Score- Your credit score has one of the biggest impacts on your interest rates and being able to qualify for a loan. The higher your credit score the lower your interest rate will be as they use this score to determine how likely you will be willing to repay the loan.
- Down Payment– The higher your down payment the lower your interest rate will be. The lender will view the borrower as less risky as there is some skin in the game if the borrower decides to not pay the loan on time.
- Loan Type and Terms-There are shorter term loans that will require a larger monthly payment while the long-term loans will require a lower monthly payment for more years. Fixed loans interest rates stay the same while Adjustable mortgages the interest rates can change.
- The Loan amount – The loan amount is determined by the purchase price of the home plus any closing costs minus your down payment.