When you’re buying a home for sale in Lake City or a nearby community, you’ll most likely have to get a mortgage loan to do it – most people do. Here’s what you need to know about interest rates and how to get the best offers from lenders.
How to Get the Best Interest Rates on Your Mortgage Loan
The interest rates that lenders are willing to offer you depend on a lot of factors – including the current market. If economic activity is sluggish, interest rates go down to stimulate more spending. If it’s booming and the Federal Reserve is worried about inflation, interest rates go up.
But you can get the best interest rates by improving where you stand in these areas:
- Credit scores
- Down payments
- Loan types
Credit Scores
Your credit score is a way that lenders judge your ability to pay them back for your mortgage loan. The higher your credit score is, the more favorable rates a lender will be willing to offer you.
Down Payments
The amount of your own money you’re willing to put down on a home has a lot to do with your interest rate. If you put down 20 percent, for example, you’ll probably qualify for a better rate than someone with a similar financial profile who’s only putting down 5 percent. (Another thing to remember: If you put down less than 20 percent, you’re going to have to pay for private mortgage insurance to boot – unless you have a VA loan.)
Related: What is a VA loan?
Loan Types
The type of loan you choose plays a role in your interest rate, too. You might get a lower rate on a USDA loan, a VA loan or an FHA loan than you would on a conventional mortgage, because each of these loan types serves a specific purpose for the good of the country.
Are You Buying a Home for Sale in Lake City?
If you’re moving to Lake City, we can help you find the perfect place to live. Call us at 386-243-0124 to tell us what you want from your home and we will begin searching right away.
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