06/11/2024
We all know that mortgage rates play a vital role in determining the affordability and overall cost of homeownership. What factors play into how rates are determined? Let's talk about what you can control and the things you can’t!
We all know that mortgage rates play a vital role in determining the affordability and overall cost of homeownership. What factors play into how rates are determined? Let's talk about what you can control and the things you can’t! Out of your control: Mortgage rates are closely tied to the overall state of the economy. Economic factors such as monetary policy, inflation, and economic growth help determine the cost of borrowing money for the consumer.
What you CAN control: Borrowers with a higher credit score indicate a lower risk to lenders, resulting in a more favorable mortgage rate. Additionally, borrowers with a larger down payment tend to have a lower loan-to-value (LTV) ratio. This measures the mortgage amount compared with the home's value. The lower the LTV, the less risk for lenders which means a lower rate to the borrower.
Have questions or want to know more about rates? Let's Chat! We are happy to answer your questions!
