Home Loan Interest Rates

“What are interest rates right now?” It may be the most commonly asked question by people looking to build or buy a home. While at any given time there is an average value for home loan interest rates, it is important to understand that there are three big factors that will determine YOUR interest rate. Your credit score, which loan program you ultimately go with for your loan, and the loan to value ratio all influence your final rate. I want to break those three down for you so you can better understand your interest rate. 

Credit Score – There are different interest rate tiers based on a range of credit scores. Typically, the higher your score, the better your interest rate. I find that our clients usually get the best rates if their credit scores are a 740 or higher. 

Loan Programs – There are many loan programs available to homebuyers. We determine your best-fit loan program after we take your full loan application. Programs available to home buyers are conventional loans, FHA loans, rural development loans, VA loans, and construction loans. Interest rates vary across loan programs, and your loan officer should be able to go over all options available to you. 

Loan to Value – The size of your down payment can influence your interest rate. As with credit scores, there are different tiers for your interest rate based on the amount of money you are able to put down on your loan. The formula used for loan to value is AMOUNT OF MONEY BORROWED/ACTUAL APPRAISED VALUE = LOAN TO VALUE. As for how rates will trend in 2019, that is largely dependent on the overall economy. The Mortgage Reports is a great online resource for up to date information on interest rates, and below are a few mortgage rate forecast charts I’ve rounded up from their website. 

To truly have a realistic idea of what your interest rate would be if you were to build or buy soon, the best course of action is to reach out to your lender who can review your unique situation based on the 3 big factors!

- Written by Brigitte LaCour Assurance Financial NMLS #858933 Assurance Financial, NMLS  ID #70876, is an Equal Housing Lender. Branch located at 1215 Camellia Blvd, Lafayette, LA 70508.