It’s that time of year when we have a better idea of what the future holds for homebuyers in Arizona. The rise and fall of mortgage interest rates is always at the forefront of the decisions that we help people make.
In fact, getting the lowest interest rate possible can help you afford more on a home purchase than you thought was possible. While interest rates can fluctuate wildly depending upon factors outside of our control, we can now issue you our best forecast for the rest of the year.
Factors That Affect Mortgage Interest Rates
It often seems as though interest rates fluctuate on a whim. However, there are both external and internal factors that influence how high and low rates get in a given time period.
For instance, lenders tend to charge higher rates when more people are buying homes. The Federal Reserve Board also lowers and raises rates, depending upon the need to influence the economy.
Internal factors that affect interest rates are things that you can often control. Your credit score, along with the type of loan that you seek, have a significant impact on the rates you are offered. Putting down a higher down payment can also help you to receive a lower rate.
Recap of 2018
The forecasts for last year mostly came true. Before the year started, it was predicted that mortgage interest rates in Arizona would rise slightly and end at just above 5%. While this did happen, they also took a slight dip towards the end of the year with the market swinging in favor of buyers.
We ended the year nicely with an average interest rate that was just below 5% for the typical loan applicant.
What to Expect This Year
Right now, the average mortgage loan interest rate on a 30-year fixed rate loan is hovering at around 4.6%. It is slightly lower if you opt for a 15-year fixed rate loan, which is around 4.07%. Since the rates are expected to stabilize, this should stay true for the majority of the year.
Variances According to Location
If you are moving from a different state, you may notice that the average home loan rates differ in Arizona from where you currently live.
In past years, interest rates also varied among the different cities in Arizona. For 2019, however, they stay close to the same rate throughout the state. Therefore, you can expect to see similar rates for Phoenix as you would for another city, such as Flagstaff.
How to Get the Best Mortgage Interest Rate
Naturally, every home buyer wants to get the best mortgage interest rate possible. After all, even the difference of a single percentage adds up over the term of your loan.
In addition to buying your house while the interest prices are low, you can improve your financial standing. Making the effort to pay down your debt and make timely payments helps to increase your credit score, which is one of the ways lenders determine your rate.
You can also compare the rates offered to you by different lenders. Our team is adept at quickly getting those numbers so that you find the one that helps you save more on interest over time.
Depending upon your eligibility, we can also help you find types of loans that offer lower mortgage interest rates. For instance, a VA loan has negotiable interest rates.
With interest rates stabilizing, the time to buy your new house is now. If you were deterred by higher interest rates in the past, give it another look.
From now through the end of the year, your forecast looks better than it has in years.