About Interest Rates
Next to the house itself, mortgage interest rates are what homebuyers focus in on when shopping for a mortgage. When looking at interest rates there are a few things to consider:
The economy affects rates. Rates can change hourly, daily or weekly depending on what the latest news is about unemployment, the stock market, the gross domestic product, consumer spending or a whole bunch of other things.
When a lot of people want to buy homes, that drives demand- and interest rates-up. Lenders only have so much money to lend out, so they want to lend to people who have a good chance of paying them back.
When fewer people want to buy homes, interest rates drop, because lenders want to encourage people to buy houses.
What kind of mortgage do you want? A fixed-rate mortgage where your interest rate stays the same through the life of your mortgage (unless you sell or refinance your home)? This can be a good idea if you want to live in your house for a long time. Or do you want a variable rate mortgage? Variable-rate mortgages (also called adjustable rate mortgages or ARMs) start out with one interest rate, and then rise to another at a set schedule. They're usually adjusted to the current published rate of an index established by another entity, like the government. The lender then adds a certain percentage to cover their costs. These can work for people who expect to move in five years, or expect to make a higher salary eventually.
Paying discount points will lower your interest rate (as well as your monthly payment) over the life of your loan. A point is a percent of interest. When you pay a discount point, you are essentially paying part of your interest to the lender up front.
Locking in may help. If interest rates are going up, see if you can "lock in" your rate before you close. This means your lender "freezes" your interest rate, typically for 30 days, before you close.
Another factor affecting your mortgage rate is, well, you. All the usual stuff like income, credit history, credit score, and your employment history comes into play here.
But don't despair if your financial picture isn't what you want it to be. It is possible to buy a home. At Embrace Home Loans, we're in the business of making it happen for you-and in a quick, stress-free, and dignified way. A new home can be yours. Let us help. Call 1-800-620-6292 right now!
About Embrace Home Loans
We're a direct lender for Fannie Mae, Freddie Mac, and an approved Ginnie Mae issuer for FHA insured mortgages. With Embrace Home Loans, you can get the loan you need. As a direct lender, you deal with us, and only us. We'll lend you the money you need, whether it's for a new home, a home renovation, a college education, or to get ahead on your high-interest debt. And we can do it in as little as 21 days. Don't put off your brighter tomorrow. Fill out our quick, no-obligation, and confidential form. Or call 1-800-620-6292.