DAILY REPUBLIC — Friday, November 4, 2022 5
SOLANO REAL ESTATE SCENE
4 things help determine your mortgage rate
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f you’re looking to buy a home, you probably want to secure the lowest interest rate possible for your home loan. Over the past couple of years, that was easier to do as the housing market saw record-low mortgage rates, but this year rates have risen dramatically. If you’re looking for ways to combat today’s higher rates and lock in the lowest one you can, here are a few factors to focus on. Since approval opportunities can vary, connect with a trusted lender for customized advice.
ments. Rates can be significantly different depending on what loan type you choose.” When working with your real estate adviser, make sure you find out what’s available in your area and which types of loans you may qualify for.
Your credit score
Your loan term
Credit scores can play a big role in your mortgage rate. Freddie Mac explains: “When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.” That’s why it’s important to maintain a good credit score. If you want to focus on improving your score, your trusted adviser can give you expert advice to help.
Another factor to consider is the term of your loan. Just like with location and 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.
Your loan type There are many types of loans, each offering different terms for qualified buyers. The Consumer Financial Protection Bureau 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 require-
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Your down payment If you’re a current homeowner looking to sell and make a move, you can use the home equity you’ve built over time toward the down payment on your next home. The Consumer Financial Protection Bureau explains: “In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So if you See McDonald, Page 8
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