Have you been keeping an eye on mortgage rates recently? One day they dip a bit, and the next day they rise again. It can be quite confusing and even a bit frustrating if you’re considering whether it’s the right time to purchase a home.

Check out the graph below. It shows data from Mortgage News Daily indicating that after a steady March, mortgage rates have experienced quite a bit of ups and downs in April.

It's normal to see this kind of fluctuation when there are changes happening in the economy.

One of the main reasons why timing the market isn’t the best approach is because you have no control over mortgage rates. However, that doesn't mean you’re without options. Despite the current economic uncertainty, there are still steps you can take.

You have the ability to manage your credit score, choose your loan type, and select the loan term. This gives you the opportunity to secure the best rate available in today's market.

Your Credit Score

Your credit score plays a significant role in determining the mortgage rate you’re eligible for. Even a tiny shift in your score can lead to a noticeable change in your monthly payments. As noted by Bankrate:

“Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”
— Bankrate

Maintaining a good credit score is crucial for qualifying for a home loan. If you're unsure about your current score or how to boost it, consider reaching out to a trusted loan officer for guidance.

Your Loan Type

There are various types of loans available, and each has its own specific requirements for buyers to qualify. The Consumer Financial Protection Bureau (CFPB) provides details on this.

“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. Talking to multiple lenders can help you better understand all of the options available to you.”
— Consumer Financial Protection Bureau (CFPB)

It's important to team up with a mortgage professional to find out which loan option is the best fit for your financial situation.

Your Loan Term

There are various types of loans, and there are also different loan terms. Freddie Mac explains it this way:

“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.”
— Freddie Mac

Most lenders usually provide conventional loans with terms of 15, 20, or 30 years. It’s a good idea to check with your loan officer to find out what option works best for you.

Bottom Line

You may not be able to influence the economy or mortgage rates, but you can partner with a reliable lender and take actions to secure the best rate available.

Let's get together to discuss steps you can take now to be well-prepared for when you're ready to buy a home.