Worried About Mortgage Rates? Control the Controllables

Worried About Mortgage Rates? Control the Controllables

Chances are you’re hearing a lot about mortgage rates right now. You may even see some headlines discussing last week’s Federal Reserve (the Fed) meeting and its implications for rates. However, the Fed doesn’t directly determine mortgage rates, even if headlines make it seem that way.

The truth is, mortgage rates are influenced by a variety of factors, including geopolitical uncertainty, inflation, the economy, and more. Predicting when all these factors will align to bring rates down is quite tricky.

That’s why it’s generally not worth it to try to time the market. There’s too much at play that you can’t control. The best thing you can do is control the controllables.

And when it comes to rates, here’s what you can influence to make your moving plans a reality.

Your Credit Score

Credit scores can play a big role in your mortgage rate. As an article from CNET explains:

“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.”

That’s why it’s even more important to maintain a good credit score right now. With rates where they are, you want to do what you can to secure the best rate possible. If you want to focus on improving your score, your trusted loan officer can provide expert advice to help.

Your Loan Type

There are many types of loans, each offering different terms for qualified buyers. The Consumer Financial Protection Bureau (CFPB) says:

“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.”

When working with your team of real estate professionals, make sure you find out what options are available for your situation and which types of loans you may qualify for.

Your Loan Term

Another factor to consider is the term of your loan. Just like with loan types, you have options. Freddie Mac says:

“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.”

Depending on your situation, the length of your loan can also impact your mortgage rate.

Bottom Line

Remember, you can’t control what happens in the broader economy, but you can control the controllables.

Work with a trusted lender to discuss the steps you can take to make a difference. By being strategic with these factors, you may be able to counter today’s higher rates and secure the lowest one possible.