Searching For The Best Current Mortgage Interest Rates
Sunday, June 7th, 2009 | Real Estate
With all of the fuss that has been talked about over the past year with the mortgage rates and how everyone is ending up in mortgage forclosure many people have been fearful of buying a home. But the fact of the matter is, the percentage of actual homeowners in the country who are fine and those who are unable to keep up with their mortgage interest rates, is pretty shocking. By the way the news media talks, you would assume every neighbor you have is facing foreclosure. But, the fact is that most people are all right either because they can afford the mortgage interest rates they signed for or that they were smart enough to get a fixed rate.
The current mortgage rate that lenders offer you will be lower if you have a high credit score, if you work for an established, reputable employer, and if you earn enough money to comfortably pay not only your mortgage payment, but your homeowner’s insurance and property taxes, as well as all your other living expenses.
Equity
Another factor that will play into the current mortgage rate you are offered on a home is how much equity you have in the home. Equity is the amount of value you have in your home over and above the debt against the house. If your house is valued at $100,000, and your home loan balance is $60,000, you have $40,000 of equity, or 40% equity in your home. When you sell your house, you will have $40,000 to put as a down payment on your new house.
Mortgage lenders love equity. The more of her own money that a buyer invests in a new home, the more likely it is that she will make her mortgage payments on time and protect her investment by paying for property taxes and insurance and maintaining the property.
Home Value
The value of the home you want to buy is another factor that will affect the current mortgage rate your lender offers you. That is because the government subsidizes home loans for homes priced under a certain price limit, and if the home you want to buy falls under that limit, you may be eligible for one of those low-interest government loans.
Length Of The Loan
Do you need a 30 year mortgage, or can you pay off your loan in 15 years? If you sign up for a shorter-term loan, you will have a higher monthly payment, but your overall current mortgage rate will be lower.
Adjustability Of The Rate
Whether you get a fixed rate mortgage or an adjustable rate mortgage is the final factor that affects your current mortgage rate on your loan. Fixed rates may be a little higher, but the rate is guaranteed to stay the same over the life of the loan.