by, Lesa Seibert, Realtor | Marketing Manager
If you’ve been watching mortgage rates lately, you’ve probably noticed how unpredictable they’ve been. One day they tick down, the next they jump back up. It’s enough to make anyone second-guess whether now is the right time to buy a home—especially here in Louisville, where the spring market is heating up fast.
Take a look at this recent trend: After a relatively calm March, rates have been on a roller coaster ride through April (data via Mortgage News Daily). It’s a perfect example of why trying to “time” the market rarely works. The truth is, you can’t control what the market does—but that doesn’t mean you’re out of options.
In fact, there are several things you can control that may have just as much impact on your mortgage rate:
This kind of up-and-down volatility is expected when economic changes are happening.
And that’s one of the reasons why trying to time the market isn’t your best move. You can’t control what happens with mortgage rates. But you’re not powerless. Even with all the economic uncertainty right now, there are things you can do.
You can control your credit score, loan type, and loan term. That way, you can get the best rate possible in today’s market.
Your Credit Score
Your credit score can really affect the mortgage rate you qualify for. Even a small change in your score can make a big difference in your monthly payment. Like Bankrate says:
“Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”
Keeping your credit score up is key when it comes to qualifying for a home loan. If you’re not sure where your score stands or how to improve it, talk to a loan officer you trust.
Your Loan Type
There are also different types of loans out there, and each one comes with unique requirements for qualified buyers. The Consumer Financial Protection Bureau (CFPB) explains:
“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 requirements. Rates can be significantly different depending on what loan type you choose. Talking to multiple lenders can help you better understand all of the options available to you.”
Always work with a mortgage professional to figure out which loan makes the most sense for you and your financial situation.
Your Loan Term
Just like there are different loan types, there are also different loan terms. Freddie Mac puts it like this:
“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.”
Most lenders typically offer 15, 20, or 30-year conventional loans. Be sure to ask your loan officer what’s best for you.
Bottom Line
You can’t control what’s happening with the economy or mortgage rates, but you can work with a trusted lender and take steps that’ll help you get the best rate possible.
