If you’re in the market for a new home, you’ll want to have a good grasp of the current state of home interest rates. There are three main forces that determine these rates, and if you have a keen understanding of each you’ll be able to secure the best loan possible for your needs. When you build with W.B. Homes, we can get you in touch with our preferred lender, Mortgage America, who will help guide you through the entire home loan process. To learn more, you’re always welcome to give us a call at 215-800-3075.
Key Factors of Home Interest Rates
Home interest rates always seem to be changing, and that’s because they depend on three main factors. These factors include:
- The Federal Reserve System: The Federal Reserve determines the federal funds rate, which is the interest rate that banks charge one another to lend Federal Reserve funds overnight. This is used as a benchmark for interest rates on credit cards and home and car loans.
- S. Treasury Notes and Bonds: The demand for these notes and bonds can impact rates.
- Banks: Banks can determine loan interest rates on a number of individual factors like missed payments and income.
This interconnected web of factors influences the housing market on both a national and local scale. Even if you’ve purchased a home in the past, it’s likely that interest rates have changed since then. A lending expert can help get you up to speed with what’s going on as you begin your home buying journey.
The Market Today
For 2019, experts predicted that interest rates would rise. Even so, most mortgage rates remain comparable to those in previous years. For you, that might mean it’s better to buy sooner rather than later and get ahead of the curve. If you have any questions or concerns about how rising interest rates could affect your purchase, your lender will be there to help. Keeping up with current home interest rates doesn’t need to be stressful. Knowledge is key to getting the best rate and loan.
Why Interest Rates Matter
The reason why interest rates matter so much is because they affect the overall cost of your home. As interest accrues over the years, you’ll be expected to pay that in addition to the actual cost of the house. Depending on how much you’re looking to spend on your monthly payments, getting a great interest rate can make all the difference. The higher the interest rate, the more you’re likely going to pay. Be sure to ask your lender about the different types of interest rates – fixed and adjustable – to find the mortgage plan that works best for you.
- Fixed Rates: A fixed interest rate means the rate will not change. Your monthly payments will be the same for the entire duration of your loan term, whether that’s 20 years or 30 years.
- Adjustable Rates: An adjustable interest rate can fluctuate over the years, meaning it may increase and it may decrease. Usually, there is a cap on how much the rate is allowed to fluctuate.
Let Us Build with You
Getting a home loan is a major commitment, so you’ll want to be sure the home you’re purchasing is everything you dreamed of. Our team members are well-versed on the entire home buying and building process and are happy to answer any questions you might have along the way. W.B. Homes can help you build a beautiful custom home in your ideal neighborhood. Take a look at what we can do for you today.