Mortgage Interest Rates

Published on: November 12th, 2021 | Written by Jimmy Vercellino

Searching for your family’s dream home can be one of the most rewarding tasks you and your partner ever do, except when you have to crunch the numbers.

You may relate to comparing mortgage rates more aggressively than the home your kids will grow up in. Our team believes your home financing adventure does not have to be difficult, and your family can enjoy your new home for a lifetime.

We have the latest mortgage and refinance rate data so you can see how the market is doing for buying a potential property. Despite any fluctuations that the news and political parties have mentioned, now is the best time to look for your family’s dream home. Our team also wants to educate you more on mortgage rates and how to get the best one besides analyzing the ever-changing data so you can be confident in your future loan decision.

What are mortgage interest rates?

You agree to pay off the house’s value over a set time period when you sign with a trusted lender on a home loan. However, they will add an interest rate on top of the home’s cost to compensate for their lending services. Each month, you will pay the lender a percentage of the home’s worth as a mortgage interest rate based on your credit score and current finances.

A 3.2% fixed rate may not seem scary at first, but it is a high amount when you consider the ramifications over 30 years (360 months). For example, you would have to pay a lender $9,600 for an interest rate of 3.2% on a $300,000 home over 30 years. It is vital for your family’s financial future and for your kids to live happy lives in their new property that you find an affordable and viable mortgage rate.

Aren’t Mortgage Rates the Same as APR?

We do not want you to receive the wrong idea of what your future loan expenses will cost based solely on your mortgage interest rate because that does not reflect the true cost. APR accounts for lender and broker fees that you will pay at closing and during the loan’s term. These fees go beyond the Federal Reserve’s or our mortgage rate amounts.

For example, your APR will consider broker fees, discount points, private mortgage insurance, origination costs, closing costs, and other figures that mortgage rates do not total. You may think you’re saving big on your family’s future home with a small percentage, but you will be further in debt than you realize if you partner with the wrong lender or forget other associate costs.

Looking at the typical private mortgage insurance (a part of APR calculations) is a great way to understand why APRs reflect your true monthly payment. A lender will implement this insurance if you have a down payment of 20% or less to protect them if you default on the loan.

This reasonable fee will drive up your costs to paying .55% to 2.25% of the loan amount each year. You would be coughing up $1,650 to $7,500 with our previous loan example, not including the mortgage rate and $300,000 loan amount.

It is vital that you speak to a lender to inquire about the APR on the loan type you want. While you can check mortgage rates online, APRs require a meeting with an in-person lender, who will walk you through finding the best APR.

How Can I Lower My Mortgage Rate?

You might be glancing at the mortgage rate statistics for the past few weeks on the housing market and not find numbers that suffice your budget. Thankfully, there are ways you can decrease your percentage and get the mortgage payment your family can afford for their lifetime happiness.

Discount Points

Discount points are a fantastic option to lower your monthly interest percentage if you have the extra cash in hand to invest in your family’s long-term financial future. They are additional fees you can opt to pay at the loan’s start that decrease your mortgage interest rate. 1 Discount Point will cost 1% of the home’s price, so a single point with your $300,000 home loan will run you $3,000.

In principle, the more discount points you put down, the lower your interest rate will become, and the less your family will pay for compensating the lender. A lender is more than willing to receive less compensation from a family they can trust to pay their loan in full without the fear of default.

Mortgage Locks for the Lowest Mortgage Rate

Finding the lowest mortgage rate for your kids’ childhood home can be daunting when percentages constantly change day by day. Rates can update only after a few hours sometimes, but a trusted home lender can secure you the best rate without worrying that it will disappear if you partner with one.

A mortgage rate lock is a process your home lender takes you through where they approve the loan and interest rate you desire and promise to give you them at closing. No matter how much the market rates fluctuate after that lock, they guarantee your rate will stay the same on your mortgage loan unless it is an adjustable-rate mortgage arm. Look closely at your home finance paperwork since your percentage is subject to change without notice if the adjustable-rate mortgage has a term of 1 year or less.

However, mortgage rate locks will last only for a short time window, so you and your spouse should secure a percentage with a home lender after you all decide on a mortgage rate. Their goal will be to finish this process before closing.

We Can Secure Your Lowest Mortgage Rate

Your family will be ecstatic when you all first walk through your new house’s front doors. However, you need the right mortgage rate to get there, acquiring the initial loan that will carry your family’s financial health throughout the loan’s life. It is imperative that you choose a finance lender to secure a mortgage rate lock since checking online mortgage calculators alone will not give you that number.

Our trusted home lenders are available to meet with you and create a personalized loan package for whatever type of loan you choose. We can assist you in timing the market with our expertise for the perfect time to make a move and help you qualify. Give our team a call at (480).800.8387 to go on this exciting home loan adventure with us!

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