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Refinance Purchase Home Equity

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Fixed ARM Interest Only FHA

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Are Mortgage Rates Important?

By Ann White

Mortgage rates are perhaps one of the most important things about your mortgage. Your rate will determine the overall amount of money you will be required to pay back during the loan. They will also determine the amount of your monthly payment and, possibly, the amount of money you can borrow. Mortgage rates can be the deciding factor in if you can afford the monthly payment on a new home.

What Can I Do To Secure Low Mortgage Rates?

Currently the mortgage rates are the lowest that they have been in decades. If you are considering purchasing a home, now is the time. If you are able to negotiate a purchase agreement, lock into your interest rate for the processing term. By “locking in” you are guaranteed by the lender to still receive that rate when it is time to close on the house, regardless of market changes. Finally, try to improve your credit score before you apply for a mortgage. Lenders place a lot of value on a credit score, boosting it, even a little, will help you get the best mortgage rates.

Why Do Mortgage Rates Change?

Mortgage rates change according to the market and to actions by the Federal Reserve Bank. As a guidance tool you can guess the approximate rate that mortgages are going for by looking at a ten year T-Bill. In most cases a mortgage interest rate will be around 2% higher than the current rate the treasury bill is offering. So, if T-Bills are offering 4% interest on a ten year bill you can guess that mortgage rates will be around 6%. Other factors include raising interest rates by the Fed and sometimes other factors in the market. Right now with an abundance of available homes on the market mortgage rates are very low.

Related posts:

1. What Are 30 Year Mortgage Rates Tied To?
2. Is My Credit Score Important In Getting A Mortgage Rate
3. Why Is My Credit Score Important In Getting A Mortgage Rate?
4. Mortgage Interest Rates – Where Do We Go From Here?
5. Why Are Mortgage Rate Predictions Important?