Before you make the decision to become a homeowner and take on the responsibility of a mortgage, it is important to first understand if you can afford this major financial commitment. This starts with understanding what the current interest rates are and how they can affect your future.
So, to help you get started, your local mortgage loan originator in Smyrna with Accurate Mortgage Group can look up what current interest rates are (because they change often) and how they can affect your mortgage.
How Interest Rates Affect Your Mortgage
An interest rate is a set percentage that is charged by your mortgage lender on the total amount borrowed by the consumer. The amount of the rate charged is determined by how well the current market is doing, the borrower’s income and their credit score.
If you have a low credit score, then you will be viewed as a high-risk borrower with a stronger possibility of defaulting on your mortgage. Because of this, lenders will be more likely to charge a higher interest rate on your Smyrna home loan, which will increase your monthly payments.
Future Projections on Interest Rates
According to realtor.com, the median listing price on homes has continued to increase during the past three years. In November 2015, the median listing price was $190,750. It increased approximately 6% to $202,000 the following year. By November 2017, the median price had increased again to $236,950 and, by 2018, the price increased an additional 9.7% to $260,000.
An increase in home prices has an indirect effect on mortgage rates. As home prices rise, there is a strong possibility that interest rates will do the same. Therefore, if you are interested in applying for a Smyrna home loan, now would be an excellent time to do so before the rates continue to rise even higher.
For more information on interest rates and how they can affect your mortgage, please contact your local mortgage lender in Smyrna – Accurate Mortgage Group – at 615-833-0456.