Financial Freedom Starts Here: Best Mortgage Rates Revealed

January 27, 2024

On your way to pursue financial freedom? 

Most homeowners in the past bought their homes at lower mortgage rates than today’s. Mortgage rates fluctuate now and then. Therefore, securing a favorable mortgage rate can be challenging enough.

Rising mortgage rates can leave anyone feeling overwhelmed. In support, according to the recent Empower research, 43% of Americans stated that they’re extremely or very concerned about the housing market.

Let’s suppose a 30-year mortgage for $300,000 at a 2.97% rate would cost you around $123,000 in interest over the life of the loan. But, recently, you have to pay around $300,000 in interest for the same loan.

As you can see, even a fraction of some percent can add up over the years.

In this comprehensive guide, we’ll walk you through how it works, the types of mortgages, a good mortgage rate, how to get the best mortgage rates, and today’s mortgage rates. 

Without any further ado, let’s dive right into it. 

How Does It Work?

Mortgage loans are usually pursued to maintain a home, land, or other types of real estate. Many of you know how it works. but, those who are unfamiliar with how it works, find us by your side.

Here’s the thing, the borrower agrees to pay the lender over time. A lender can be a group (public or private), an individual, or a financial institution that makes funds available.

Interesting Fact:
In the first three quarters of 2023, Americans originated $1.1 trillion in new mortgage debt. 
To break it down, 77.4% of it was issued to super-prime borrowers with credit scores of 720, and 3.6% of it was issued to subprime borrowers having scores below 620.

Now the borrower has to pay back in a series of regular payments divided into principal and interest. Plus, borrowers are liable to pay interest over a specified number of years.

In contrast, the property then becomes collateral to secure the loan. 

Since mortgages were fully amortized, regular payments stayed the same but proportions of principal vs. interest will be paid over the life of the loan along with each regular payment. 

Types of Mortgages 

There are private lenders as well as government-backed loan programs. 

They purchase, guarantee, and securitize mortgages in the secondary mortgage market just like the Federal Housing Administration (FHA). 

Other than that, 4 other types of mortgages. Those are as follows:

  1. Simple mortgage: With a simple mortgage, the mortgagor binds himself personally to pay the mortgage money. 

    They further agree on the terms that if they fail to pay the following amount as per the contract then lenders shall have a right to sell the property. 

  1. Usufructuary Mortgage: The lender or mortgagor delivers possession and binds to deliver the property to the mortgagee. 

    The borrowers are authorized to retain their possession until they are done paying with all the money. 

  1. Anomalous Mortgage: It’s not your simple mortgage, it’s a mortgage secured by a deposit of the title deeds within the meaning of section 58. 

Today’s Mortgage Rates

Loan TypePurchaseRefinance
30-Year Fixed7.16%7.58%
FHA 30-Year Fixed6.91%7.44%
VA 30-Year Fixed6.77%7.34%
Jumbo 30-Year Fixed6.44%6.44%
20-Year Fixed6.85%7.40%
15-Year Fixed6.24%6.51%
FHA 15-Year Fixed6.79%6.96%
Jumbo 15-Year Fixed6.52%6.52%
10-Year Fixed6.14%6.34%
10/6 ARM7.47%7.67%
7/6 ARM7.40%7.67%
Jumbo 7/6 ARM6.21%6.31%
5/6 ARM7.55%7.70%
Jumbo 5/6 ARM6.31%6.31%

A Good Mortgage Rate?

In layman’s language, a good mortgage is represented as the lowest available rate for a 30-year fixed mortgage. It significantly depends on the borrower.

Statistics:
The following chart illustrates the existing composition of mortgage terms and originations in the US. 

Statistics:
The following chart illustrates the existing composition of mortgage terms and originations in the US. 

Although the lender offers the best lowest rates possible, in the end, it depends upon the credit history, income, down payment, and other debts (if any).

Let’s say, an individual with a low credit score found a good mortgage rate higher than someone who has a higher credit score. 

How to Get the Best Mortgage Rates?

How to Get the Best Mortgage Deal

Several factors should be taken into account when deciding to acquire mortgages. Below are the following factors which ensure you get the best deal:

  • Examine and maintain a good credit score.
  • With a mortgage calculator, estimate the amount of down payment you are going to deposit.
  • How long are you going to stay in your possession?
  • Determine the type by considering fixed-rate or variable-rate.
  • Find out if lenders are offering competitive rates based on your credit profile or not. 
  • Do not open credit accounts like credit cards or personal loans. Why? They can temporarily lower your credit score. 

Aspects to Qualify for Better Mortgage Rates?

The following factors ensure you get the most competitive rates possible:

  1. Good Credit Score: As previously mentioned, having a good credit score is a determining factor concerning mortgage rates. Therefore, individuals with high credit scores secure a lower rate.

Do You Know?:
As of now, the research has revealed that Americans owe $12.14 trillion on 84.0 million mortgages.
It often comes to an average of $144,593 per person with a mortgage on their credit report.

  1. Increased Down Payment: A few lenders offer lower rates if individuals make a higher down payment. For instance, a down payment of 20% could get attractive rates sometimes.
  1. Lower your Debt-to-Income Ratio: The DTI ratio examines the total of the monthly debt obligation and divides it by the gross income. DTI of 43% or higher indicates that one may have challenges meeting their monthly obligations. 

Once you qualify for better mortgage rates, you can save tens of thousands of dollars over the life of the loan.

Summing Up

No one can predict where rates or home prices are headed. But, the lower the economy due to fed policy, the mortgage rates are likely to moderate. 

Too many factors are at play concerning the accuracy of the rates including credit score, down payment, DTI ratio, closing cost, discount points, property taxes, HOA dues, etc. 

Keep in mind that loan rates do not include amounts for taxes or insurance premiums.

Bring your best to qualify for better mortgage rates and embrace financial freedom for a lifetime.  




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