The Fort Lauderdale Mortgage Rate Information Center
When getting ready to buy your first home, a vacation house, or even an investment property, there can be a lot of misunderstanding regarding mortgage rates and loan types. Each different loan has its benefits and those benefits along with other factors can affect the amounts that a lender is able or willing to offer a borrower. Knowing what the differences are and the processes the lender takes to dictate the various interest rates makes taking the step to buying a home that much more comfortable.
What is a Mortgage Rate?
A Mortgage rate is the rate of interest applied to a loan for a house by the lender. Each lender has a different set of regulations they use to decide the proper rate to offer to each borrower.
What Kinds of Mortgages Are There?
- Conventional Loans - The government does not ensure these loans. They can have a fixed or an adjustable interest rate.
- Fixed Rate Mortgage - A loan that has an interest rate that stays the same throughout the full life of the loan. The compounding frequency, the loan duration, the amount lent, and the interest rate are all used by the lender to calculate the payments.
- Variable rate mortgage- Also known as an adjustable-rate mortgage. This type of loan rate is not fixed but instead is periodically changed based on a predetermined set of variables agreed upon between the borrower and the lender.
- Interest Only Mortgage- A loan where the borrower pays only interest for a duration agreed upon by themselves and the lender. At the end of the loan contract, the borrower must renegotiate a longer term for the interest-only loan, set up an amortized (loan that includes principal with interest payments) mortgage, or pay the full balance of the principal.
- Graduated Payment Mortgage- a mortgage with lower starting monthly payments that slowly increase over a set time. These loans are set up for people who are in a situation where they will have a higher income in the foreseeable future but cannot afford a large payment at the onset of the loan.
- FHA Mortgage –Only qualified lenders can offer FHA (federal housing administration) loans. This type of mortgage is for lower-income borrowers who cannot afford to make the down payment typically required by a conventional loan.
- VA Loan – The VA (veterans affairs) mortgage type is insured by the United States Department of Veterans Affairs. This program helps veterans to buy houses with little or no down payment as well as getting them the home financing that they need.
What Affects Interest Rates?
Many different factors determine mortgage rates. Lenders use information about the borrower and the property being purchased such as:
- The borrower’s credit score
- The location of the property
- The current economy
- The type of mortgage
- The duration of the loan
Due to the variations in the types of loans, there are standard differences in the rates that are available for each type of loan.
Each lender calculates each type of mortgage and its assigned interest rate by evaluating some of the same statistical information. Lenders use your eligibility for the program, the buyer market, and your income stability to assess your risk level. Once the bank has determined how likely the loan is to go into default, they can set a rate based upon that scale. Some loan types have the benefit of a lower payment with a higher interest rate, while other mortgages require more substantial payments with lower interest rates.
Will the Length of a Mortgage Change the Interest Rate?
The Mortgage Rates in Fort Lauderdale, FL
In, mortgage rates are lower due to a higher percentage of retirement based communities. A lot of borrowers have guaranteed income that helps them to have lower risk assessments. Lower risk levels and a high borrower demand makes Fort Lauderdale mortgage quotes some of the lowest around. Here at Nationwide Home Loans, we have some of the best mortgage rates in Fort Lauderdale. The staff here are trained to assist you with the entire process starting with your application to becoming a homeowner. With our team’s help, can make your home financing dreams come true.