MORTGAGE RATE MATH

Dated: 01/10/2018

Views: 30

MORTGAGE RATE MATH

Shopping around for the best possible mortgage terms is an important part of the home buying process. A few percentage points can make a difference of thousands of dollars over the life of the mortgage. Mortgage rates can be a bit of a mystery—especially for first-time homebuyers—so here’s an overview of the most important factors.

YOUR FICO SCORE

This is the part of the mortgage equation that should come as no surprise. From a lender’s perspective, your financial history is the best indicator of whether you’ll be a stable, responsible borrower. It’s the primary factor in determining your mortgage rate, so if you’re planning on purchasing a home in the near future, concentrate first and foremost on improving your FICO score.

LOCATION AND SIZE MATTERS

“Location, location, location” is an old cliché in real estate, but it also applies to mortgage rates. The city, county, and state that you live will factor into your mortgage rate. Mortgage rates can also vary among local lenders and the size of the loan will come into play. The more money you borrow, the higher your interest rate is likely to be, unless you’re also increasing your down payment.

LOAN LENGTH AND TYPE

Lenders incentivize shorter mortgage terms with lower mortgage rates, so you’ll get a more favorable rate for a 15- or 20-year mortgage versus a 30-year mortgage. If you can afford the higher monthly payment, you’ll pay much less in interest over the course of the loan term.

Search Homes For Sale | We're HIRING | Crypto Currency | Travel

Coverage Area

Acworth | Alpharetta | Atlanta | Austell | Avondale Estates | Ball Ground | Berkeley Lake | Big Canoe | Braselton | Brookhaven | Buckhead | Buford | Canton | Carrollton | Cartersville | Cave Spring | Cedartown | Chamblee | Chattahoochee Hills | Clarkston | Cleveland | College Park | Commerce | Conley | Conyers | Covington | Cumming | Dacula | Dahlonega | Dallas | Dawsonville | Decatur | Doraville | Douglasville | Duluth | Dunwoody | East Point | Ellenwood | Fairburn | Fayetteville | Flowery Branch | Forest Park | Gainesville | Grayson | Hampton | Hapeville | Hiram | Jasper | Johns Creek | Jonesboro | Kennesaw | Lawrenceville | Lilburn | Lithia Springs | Lithonia | Locust Grove | Loganville | Mableton | Marietta | Mcdonough | Milton | Newnan | Peachtree City | Peachtree Corners | Powder Springs | Riverdale | Rockmart | Rome | Roswell | Sandy Springs | Savannah | Smyrna | Snellville | Social Circle | Statham | Stockbridge | Stone Mountain | Sugar Hill | Suwanee | Talking Rock | Tucker | Union City | Villa Rica | Waleska | White | Winder | Woodstock | Zebulon

Blog author image

John Thomas

Hi, I'm John Thomas, and I am a full-time/full-service Realtor® at eXp Realty in Atlanta Georgia. I was born in Chicago, grew up in Elmhurst. I attended York High School and Loras College. I have a B....

Latest Blog Posts

Why Due Diligence Is Real Estate Lingo You Need To Know

After a long, grueling search, including several overheated bidding wars, Jim and Claire found the home of their dreams. They were ecstatic when their offer was accepted and the transaction

Read More

Which Renovations Will Boost My Home Value The Most

Of the many questions we field from homeowners thinking of selling their homes, the most frequent starts with “What’s it worth?” Of course they’re referring to their home’s value, but

Read More

Is A Starter Home Right For You

When you’re looking for the right home you might find yourself with an endless sequence of choices. House or condo? Suburban or city center? But there is one particular choice that bothers a lot

Read More

HOW TO BE A GOOD OPEN HOUSE GUEST

It is exciting to go to open houses and dream of the possibilities a new home brings. Going to open houses is crucial to finding the right home. The next time you take a tour of a home, keep these

Read More