Everybody Wants to Know:
What are Current Interest Rates?
One of the most important things you can do when buying a new home is to sit down and compare interest rates.
When you see mortgage interest rates listed on lender websites they are just estimates or quotes and will vary based on your unique situation.
For that reason, we do not post interest rates online. We have found it can often be misleading and confusing for our clients.
At Churchill Mortgage, we want you to get the Smarter Mortgage. It’s easy to get trapped into a mortgage that just doesn’t make sense for you. Getting the Smarter Mortgage plan keeps you engaged through the home buying (or refinancing) process and provides tools to better facilitate financial decision before and after your loan closes.
The result allows you to choose the right mortgage for your situation with guidance from a Home Loan Specialist, and helps you build wealth over time.
Want to know your actual numbers? Connect with a Home Loan Specialist!
So then...
What Actually Determines Your Interest Rate??
Interest rates are based on the bond market (mortgage-backed securities) and are typically standard across the industry. So, going with a ‘low-rate lender’ is a bit of a misnomer since rates don’t really fluctuate that much across lenders.
On any given day, there are a variety of factors that can impact your specific interest rate:
- Home price and loan amount: Your home price minus your down payment will determine how much you’ll borrow which helps determine how much the interest rate will be.
- Down payment: Generally, a higher percentage down payment equals a lower interest rate. The more money you put down, the more stake you have in the property.
- Loan term: Shorter terms (like a 15-year or a 20-year) generally have lower interest rates than a 30-year term.
- Interest rate type: Interest rates come in two basic types: fixed and adjustable. Fixed rates do not change over time. Adjustable rates, on the other hand, have an initial fixed period then go up or down based on the market. For example, a 5-year ARM loan will have a fixed-rate for the first 5 years and then the rate will fluctuate from the 6th year onward.
- Loan type: Different categories of loans (like conventional, fixed-rate, FHA, etc.) have different rates.
- Credit score: Primarily based on credit report information usually sourced from credit bureaus. Typically, this is called your FICO score and is based on your credit history. If you are debt-free, you will have a zero-credit score.
Look at the Real Numbers and Understand Your Options
The lowest interest rate doesn’t always get you the best deal, so don’t get too excited about an interest rate before you do the math. Take the time to talk a qualified home loan expert who will listen to what you have to say and customize the best loan terms and interest rate for you.
It’s easy to let mortgage rates distract you so stay focused on your main goal—saving money!
What's the Difference?
Mortgage Interest Rates vs. APR
While interest rates and annual percentage rates are related, they are not the same, but you will see both listed for mortgages.
- The mortgage interest rate is the interest you will pay on your home loan. The lower your interest rate, the lower your payment.
- APR is the interest rate PLUS other fees and costs associated with buying a home, so this is what you’ll end up paying on top of the principal (or the amount you borrowed for your mortgage). By law, the APR must be disclosed in any loan agreement (and on all advertising for loans that specify an interest rate). If you see an advertisement with a super low interest rate with no APR in sight, it’s probably best to steer clear.
Common Home Buyer Question:
How Do I Get the Best Mortgage Rate?
A Churchill Home Loan Specialist will empower you to make the best decision for you and your family. In our Home Buyer Strategy Meeting we talk about your short- and long-term financial goals, how to get the best interest rate for your situation, and establish a baseline for how much house you can afford.
If you’re not quite ready to talk to a Home Loan Specialist, here’s a few ways you can improve your interest rate:
- Get a consistent, fixed-rate mortgage so your interest rate will not fluctuate over the life of the loan. Adjustable rate mortgages might start off with a lower interest rate but will change over time.
- Take advantage of special loan programs that may be available to you (especially if you are a first-time home buyer).
- Save for a down payment. You’ll get a better interest rate the more money you put toward your down payment.
- Keep an eye on your credit score since interest rates can be impacted by your credit history. This is important even if you have you are debt free and have no credit score—you want to make sure your credit score stays at 0!
- Check out all your loan options. Generally, a 15-year loan will have a lower interest rate than a 30-year loan. A 15-year loan will have a lower interest rate than a 30-year loan, for example.
- Reduce as much debt as possible.
The Truth About Loan Quotes
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