For the typical home buyer, the way the mortgage rates on any loan option are calculated can be very confusing. This is not due to any intentional confusion created by mortgage companies and lenders, but rather due to the complex number of issues that have an influence on the rates.
When looking at 30 year fixed rate mortgage rates, there are some issues or factors that are under the control of the buyer. These are actually a small number of factors, but they play a big part in the rate the lender will offer. The two big issues under the buyer’s control are the individual’s credit score and the down payment the buyer is able to put up.
These factors will influence how mortgage rates the lender will offer. The better the credit score (particularly over 760) and the higher the down payment, the more the lender will reduce the advertised rate.
Other Factors
Other factors play an important role in the 30 year fixed rate mortgage rates that the lender will offer. These include the type of mortgage (refinance or new home purchases, investment property or second home) as well as the economy as a whole. The market for homes can also have an impact as well as the geographic location.
Additionally, if the homeowner is refinancing a 30 year fixed rate loan, rates will be impacted if the buyer decides to pull out cash from the home equity built up during the years paying into the existing mortgage.
Shopping around with different lenders is perhaps the most important factor for any home buyer to consider. How one lender may view a loan application can be very different from how another may see the individual and the rate offer they make.
To find out the lowest 30 year fixed rate mortgage rates, talk to our lending experts at Guaranteed Rate.
