As interest rates go up, many people are wondering how they can get the best rates or if they should even be looking to purchase their next property.  Interest rates rely on several things and is important to talk to your lender to find out how your specific set of circumstances will affect the type of loan and interest you will receive.  This is an important first step that will help you pre-qualify for a loan and give you an idea of what your monthly mortgage payments will look like.

When you talk to your lender, they will review several things to find you the best interest rate, here are some of the things that lender will review:

• your credit score
• the type of loan you plan to take out
  • 30 year vs 15 year
  • Conventional vs FHA vs VA
• how much money you plan to put down
  • the more you put down the lower the interest rate
• home price & amount of loan
• property type
  • condos and multi-unit dwellings often have higher interest rates
• property use
  • will vary depending on if you plan to live in or use as investment

There may be some other factors that your lender may review but this are a good starting point.  One thing to keep in mind is the total cost to you as the borrower rather than the interest rate, for instance if you put less than 20% down you may have to pay private mortgage insurance (PMI) which will make your monthly payments higher.  Talk to your lender and work out the different scenarios and what is best for you in the long run.

Our preferred lenders always review the various aspects of each individual and talk through the various options to help determine the best loan and the interest rate that look best long term.  Remember that even though interest rates have gone up some, they are still historically low and should not keep you out of the real estate market.

If you are unsure of which lender to contact, reach out, we work with some amazing mortgage companies, there is nothing in it for us, just first class service for our clients!

By: Carrie Ernst

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