It goes without saying that purchasing a home is one of the biggest financial decisions you will ever make. And with there being so much to know about your finances during this time, it is easy to feel overwhelmed.
We want to make the financial process as easy as possible for you. So here’s everything to know about home mortgage interest rates.
What is an interest rate?
Simply put, your mortgage interest rate is the price you pay to finance your property. The interest rate is grouped as part of your total loan balance and is paid on a monthly basis.
How does the interest rate work?
Until you lock in a rate, mortgage interest rates can fluctuate depending on how strong the economy is at the time. Currently, the interest rates for a 30-year fixed-rate mortgage is at one of the lowest rates since 2000, and this could be due to a bunch of different economic factors such as the stock market health, inflation, and nationwide unemployment increases. But this is a good thing, as the lower the interest rate is on your loan, the less amount of money you have to pay back!
Does the interest rate change?
Not when you choose a fixed-rate loan, which means that your interest rate will stay the same throughout the same duration of your loan.
However, it is important to note that the interest rate is based on the total loan balance. Say you have a 3% interest rate on your mortgage. This means that for your first payment, you’ll be paying 3% off of the entire loan amount, when 10 years down the road, you’ll be paying 3% on the remaining balance.
How do I get a good interest rate?
There are a bunch of factors that play into what interest rate you qualify for. They include:
Have any questions about your mortgage interest rate?
Contact Kay Harris Real Estate with any questions you may have, we’re here to help!