Mortgage interest rate is the rate of interest charged on a home mortgage loan. In most cases, mortgage rates are based largely on mortgage-backed securities. Rates can be fixed or variable.

Mortgage rates rise and fall and can drastically affect the homebuyer’s market and affordability. Factors that determine interest rate include credit score and home price, both of which are among the most significant influencers. Other factors are down payment, loan type and loan terms.

Fannie Mae and Freddie Mac play a major role in how rates rise and fall. After buying mortgages and compiling them into securities that behave like bonds, these large financial institutions then sell the mortgage-backed securities to investors. Ultimately, Fannie Mae and Freddie Mac seek to keep the money moving through the mortgage finance system.

When you are ready to purchase a home, we can discuss your expected rate and the best time to lock in your rate. Please call me today to set up an appointment.