Mortgage Rates Today Can Affect Your Financial Situation
If you’re looking to buy a home and are curious about mortgage rates, you may have typed “mortgage rates today” in the Google search bar. This is a great first step in determining if the current market is the right one for you to buy in. Mortgage rates affect your overall house payment and the total amount you pay on your home. Mortgage rates are something you should know before deciding to make the leap from renting to owning.
Since your mortgage rate can have such a big impact on your monthly mortgage payments, it’s important to put yourself in the best financial position possible before applying for a home loan. These five tips will help get you there, so you can get the best possible rate on your first mortgage loan.
1.) Improve your credit score: The first step towards getting the best mortgage rate possible is improving your credit score. It’s recommended that you have a credit score of 680 in order to qualify for a mortgage, however; the higher your score, the lower your rate most likely will be. Attending one of Launch CU’s Credit Score Seminars can give you valuable tips. Check our calendar for upcoming dates.
2.) Determine how long you want the loan for: In some instances, a shorter loan term can provide you with a lower interest rate, however; this will result in higher monthly payments. Before you decide on a loan term, utilize Launch CU’s mortgage term calculator to help you compare up to three different mortgages to find out which one works best for you.
3.) Consider making a larger down payment: The larger your down payment, the deeper your initial equity stake. This means that you pose less risk to the lender, and could potentially get a lower interest rate.
4.) Pay down your debt: A major factor financial institutions take into consideration when determining your mortgage interest rate is your debt-to-income ratio. This ratio is the percentage of your monthly gross income that goes towards paying debts. If your debt is higher than your income, a lender may put you in a higher risk category which could leave you with a higher interest rate. Before you apply for a mortgage, consider paying down existing credit card debt, car loans, medical bills, etc.
5.) Stay in your job: Employment and income stability could play a role in the interest rate you obtain. Stable income usually is perceived as lower risk to a financial institution.
6.) Know how much you can afford: Above all, make sure you know how much home you can afford before you start your home search. Utilize Launch CU’s home loan calculator to help you determine this. A mortgage payment calculator is also a great tool you can use to estimate what your monthly mortgage payments will be.
As you can see mortgage rates today can have a major impact on your current and future financial situation. Launch Credit Union offers low-cost mortgage options with payments that make sense for your unique financial situation, as well as flexible terms that fit your needs. Visit our website for additional information on Launch CU mortgages, as well as today’s mortgage interest rates.