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Worried About Mortgage Rates? Control What You Can

Friday, June 21, 2024   /   by Dick Keenan

Worried About Mortgage Rates? Control What You Can

You've likely been hearing a lot about mortgage rates lately, especially with recent discussions about the Federal Reserve’s (the Fed) meetings. However, it’s important to understand that the Fed doesn’t directly set mortgage rates, despite what some headlines suggest.

Mortgage rates are influenced by various factors, including geopolitical events, inflation, and the overall economy. Predicting when these elements will align to bring rates down is quite challenging.

Instead of trying to time the market, focus on what you can control to make your homebuying plans a reality. Here’s what you can do:

Your Credit Score

Your credit score significantly impacts your mortgage rate. As CNET notes:

“You can’t control the economic factors influencing interest rates. But you can get the best rate for your situation, and improving your credit score is the right place to start. Lenders look at your credit score to decide whether to approve you for a loan and at what interest rate. A higher credit score can help you secure a lower interest rate, maybe even better than the average.”

Maintaining a good credit score is crucial, especially now. If you’re looking to improve your score, seek advice from a trusted loan officer.

Your Loan Type

Different loan types come with varying terms. 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.”

Work with your real estate team to explore available loan options and determine which types you qualify for.

Your Loan Term

The term of your loan also affects your mortgage rate. Freddie Mac advises:

“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.”

The length of your loan can influence your mortgage rate, so consider your options carefully.

Bottom Line

While you can’t control the broader economy, you can control certain aspects of your mortgage. Work with a trusted lender to focus on what you can manage. By being strategic about these factors, you might secure a more favorable mortgage rate despite the current market conditions.

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The Keenan Carter Group
Richard Keenan And Narlene Carter Keenan
350 James Way, Ste 130
Pismo Beach, CA 93449
Keller Williams Realty Central Coast DRE# 02005015
The Keenan Carter Group DRE# 00860187
Each Office is Independently Owned and Operated.

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