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Worried About Mortgage Rates? Control the Controllables

Tuesday, June 18, 2024   /   by Amy Richardson

Worried About Mortgage Rates? Control the Controllables

Chances are you’re hearing a lot about mortgage rates right
now. You may even see some headlines talking about last week’s Federal Reserve
(the Fed) meeting and what it means for rates. But the Fed doesn’t determine
mortgage rates, even if the headlines make it sound like they do.

The truth is, mortgage rates are impacted by a lot of
factors: geo-political uncertainty, inflation and the economy, and more. And
trying to pin down when all those factors will line up enough for rates to come
down is tricky.

That’s why it’s generally not worth it to try to time the
market. There’s too much at play that you can’t control. The best thing you can
do is control the controllables.

And when it comes to rates, here’s what you can influence to
make your moving plans a reality.

 

Your Credit Score

Credit scores can play a big role in your mortgage rate. As
an article from CNET explains:

“You can’t control the economic factors influencing
interest rates. But you can get the best rate for your situation, and improving
your credit score is the right place to start. Lenders look at your credit
score to decide whether to approve you for a loan and at what interest rate. A
higher credit score can help you secure a lower interest rate, maybe even
better than the average.”

That’s why it’s even more important to maintain a good
credit score right now. With rates where they are, you want to do what you can
to get the best rate possible. If you want to focus on improving your score,
your trusted loan officer can give you expert advice to help.

 

Your Loan Type

There are many types of loans, each offering different terms
for qualified buyers. The Consumer Financial Protection Bureau (CFPB) says:

“There are several broad categories of mortgage loans,
such as conventional, FHA, USDA, and VA loans. Lenders decide which products to
offer, and loan types have different eligibility requirements. Rates can be
significantly different depending on what loan type you choose.”

When working with your team of real estate professionals,
make sure you find out what’s available for your situation and which types of
loans you may qualify for.

 

Your Loan Term

Another factor to consider is the term of your loan. Just
like with loan types, you have options. Freddie Mac says:

 

“When choosing the right home loan for you, it’s
important to consider the loan term, which is the length of time it will take
you to repay your loan before you fully own your home. Your loan term will
affect your interest rate, monthly payment, and the total amount of interest
you will pay over the life of the loan.”

Depending on your situation, the length of your loan can
also change your mortgage rate.

 

Bottom Line

Remember, you can’t control what happens in the broader
economy. But you can control the controllables.

Work with a trusted lender to go over the things you can do
that’ll make a difference. By being strategic with these factors, you may be
able to combat today’s higher rates and lock in the lowest one you can.


  homebuyers, housing market, real estate, mortgage rates

Home Smart - Savvy Realty Group
Amy Richardson
6909 W Ray Rd #21
Chandler, AZ 85226
602-448-8081

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