Tennessee Mortgage Rates
The process of buying a home comes with some uncertainty. For instance, many prospective buyers are usually concerned about the mortgage rates they will get. To make matters worse, whatever rates are advertised by lenders are not necessarily the same rates charged on loans. It is possible to see a mortgage company advertising a 4% loan, but when you apply you get a 3% or 5% interest rate. If you understand how mortgage rates work, you will be able to figure out why that is the case. Today we are going to explain how Tennessee mortgage rates are determined. We have explained the same in more details, but here’s a summary to get you started.
First of all, a single percentage difference in interest rates will affect your monthly payments in a huge way. You can save hundreds of dollars each month if you opt for a Tennessee mortgage whose rate is just 1% lower than the next mortgage.
Now, the manner by which Tennessee lenders arrive at their mortgage rates depends on many factors.
- The first is the type of mortgage. Jumbos attract the highest rates because they are very risky to the lender. On the other hand, VA loans are arguably the cheapest since the government subsidizes them more than any other. In between the two are conventional, FHA and USDA loans which have average mortgage rates.
- The second factor is whether your Tennessee mortgage is a fixed-rate or an adjustable-rate. The latter starts with lower rates. However, over time, the rates might increase significantly. As for fixed-rate mortgages, your rates will remain the same throughout the whole mortgage term.
- Thirdly, your mortgage rates will be determined by the real estate market. The activities of lenders and borrowers (mortgage companies and homebuyers) usually bring interest rates to an equilibrium. This is usually the market value and it is the rate that lenders will advertise.
- Finally (and perhaps most importantly) your lender will also use your personal profile while determining your Tennessee mortgage rates. That’s where your credit score, employment history, credit history, down payment and other factors come into play. A better profile will land you very low interest rates.
Want to know what interest rates you will be charged? Get a quick mortgage quote from HomeRate Mortgage.
Tennessee City Mortgage Service Areas