Mortgage Rates Today Can Affect Your Financial Situation

If you are looking to buy a home you may have conducted a Google search similar to, mortgage rates today. This is a great first step in helping you determine how much home you can afford, as well as if now is a good time to invest in a home of your own. To take it a step further, do you know how your mortgage rate could affect your overall house payment or total amount paid on your home? This is something you should know before deciding to make the leap from renting to owning.

Since your mortgage rate can have such a big impact on your monthly mortgage payments, it’s highly important for you to put yourself in the best financial position possible before applying for your home loan. These five tips will help get you there, so you can get the best possible rate on your first mortgage loan.

  1. Improve your credit score: The first step towards getting the best mortgage rate possible is improving your credit score. It’s recommended that you have a credit score of 640 in order to qualify for a mortgage, however; mortgage rates todaythe higher your score, the lower your rate will probably be. Attending one of Launch FCU’s Credit Score Seminars can give you valuable tips. Check our calendar for upcoming dates.
  2. Determine how long you want the loan for: In some instances, a shorter loan term can provide you with a lower interest rate, however; this will result in higher monthly payments. Before you decide on a loan term, utilize Launch FCU’s mortgage term calculator to help you compare up to three different mortgages to find out which one works best for your current financial situation.
  3. Consider making a larger down payment: The larger your down payment, the deeper your initial equity stake. This means that you pose less risk to the lender, and could potentially get a lower interest rate.
  4. Pay down your debt: A major factor financial institutions take into consideration when determining your mortgage interest rate is your debt-to-income ratio. This ratio is the percentage of your monthly gross income that goes towards paying debts. If your debt is higher than your income, a lender may put you in a higher risk category which could place you in a higher interest rate. Before you apply for a mortgage, consider paying down existing credit card debt, car loans, medical bills, etc.
  5. Stay in your job: Employment and income stability could play a role in the interest rate you obtain. Stable income usually is perceived as lower risk to a financial institution.
  6. Know how much you can afford: Above all, make sure you know how much home you can afford before you start your home search. Utilize Launch FCU’s home loan calculator to help you determine this. A mortgage payment calculator is also a great tool you can use to estimate what your monthly mortgage payments will be.

As you can see mortgage rates today can have a major impact on your current and future financial situation. Launch Federal Credit Union offers low-cost mortgage options with payments that make sense for your unique financial situation, as well as flexible terms to fit your needs. Visit our website for additional information on Launch FCU mortgages, as well as today’s mortgage interest rates. When you’re ready, give us a call or apply online to open doors to your future for as little as 3% down!

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