A basic guide to getting a good mortgage rate: Compare & choose

by Kate Hogan 03/06/2023

If you’re trying to find the best possible mortgage rate, compare and research your options carefully. Similarly to when comparison-shopping for products or services, the more you know about the choices available to you, the better your decision will be.

However, mortgage rates are more complicated than other types of comparison shopping. With multiple factors determining interest rates, here are the most important things to know:

Factors affecting mortgage rates

Your credit score is one major factor in determining your loan rates. The higher your score, the lower your risk is considered by the lender, and the lower your payment rate. Other financial details like debt-to-income ratio are also on the table. 

The type of mortgage you choose also impacts your rates. A fixed-rate mortgage will have a higher interest rate overall, but will never change. An adjustable rate mortgage may begin with a low rate, but increase over the life of the loan.

Down payment amount can also affect mortgage interest rates. Often, a larger down payment might qualify you for a lower rate.

Market factors

Unfortunately, it’s not possible to control every factor in determining mortgage rates. The national and global economies and the Federal Reserve all affect the mortgage market and interest rates. Mortgage lenders take these “big picture” factors into account with your personal financials when offering you a rate.

How to find the best mortgage rate

It can seem overwhelming to check interest rates while searching for a mortgage. Unfortunately, it can require some time to learn the best way to do it. 

Comparing loan rates with lenders directly is the quickest and most important step in the house purchasing process. Even small differences in rates of six figures will accumulate dramatically over a 30-year mortgage. 

Knowing what to expect for a monthly mortgage payment is crucial to budgeting, and understanding the ins-and-outs of how an interest rate is calculated will help. Consult a financial advisor or research online to find the most pertinent information when searching for your perfect mortgage loan.

About the Author

Kate Hogan

Kate Hogan – Amherst MA Realtor ® and Pioneer Valley

Your number one source for Real Estate in Amherst, MA, and surrounding towns!

Kate Hogan, a 20-year resident of Amherst and Top Producer at Brick & Mortar realty, has that unique combination of qualities you need in an agent: a big picture view of the entire Five College area, towns, and neighborhoods, a high standard of professionalism, and an innate talent for understanding homes. All of that, plus this savvy agent is known for being experienced, knowledgeable, and a lot of fun to work with.  As a full-time real estate professional, Kate’s approach is focused on getting to know her clients as real people and taking care of them from beginning to end.