The three factors that determine mortgage rates
- The economy
- Your Mortgage Lender
The economy: The strength of the US economy sets the overall tone for the mortgage rates, When the economy is strong, rate tend to rise. When weak, rates tend to fall.
You: Individual factors determine whether you’re on high or low end of the mortgage spectrum… example, high credit scores and a big down payment vs a lower score and lower down payment… A borrower with high credit and a big down payment might get a better rate than someone with lower credit and little down-payment.
Your Mortgage Lender: Lenders offer different rates to different customers, depending on what types of loans they specialize in and how much capacity they have for new business. That’s why it’s important to shop for mortgage rates with more than one lender. If you’re currently shopping for mortgage or refinance rates, that last point is probably most important. You can’t change the overall rate environment. And unless you have a few months, it’s tough to raise your credit substantially or save for a bigger down payment, But you can always shop around with multiple lenders