Home Loan Mortgage Interest Rates

The first thing you look for when shopping for mortgages is the APR. With so many mortgage providers, it is a well-known fact that the plethora of APRs offered are vast. They all tend to circle around the general rates levied by the big banks in the USA such as BOA, but specialized mortgages such as those provided for Veterans or by the US Dept. of Agriculture have different APRs and their applications.

Interest rates for different home loans

Steve Morgan of Bethany Beach Lender has made a few observations in respect of some of these mortgages:

1. Mortgages provided by Federal Housing Administration are useful for people with average credit scores of about 580 and pay a 5 percent deposit for the house. Their APRs are also comparatively lower. Their monthly mortgage insurance premiums (MIP) however are higher and so it is at the time of closing so that should be accounted for when you review this mortgage option.

2. Provided by the Department of Veteran Affairs, these mortgages having everything going for them – their APRs are the lowest, they do not require MIP no matter how low our down-payment is, you can get 100 percent financing under this mortgage (no deposit payable at all) and the deal-clincher is the mortgage portability to the new buyer, should you choose to sell the house. Your course should have some military background to consider this mortgage.

3. Conventional Mortgage APRs – Provided mainly by Fannie Mae and Freddie Mac, this lending duo provides mortgages at reasonable APRs provided your credit score is above 680 and you make at least 20 percent of the asking price as the down payment. Lower your deposit, higher your APR goes except under special rate schemes.

4. Department of Agriculture mortgages – Loans are made available to people of rural backgrounds at extremely low APRs even with zero deposit. Their main criteria are the credit score (more than 620) and the debt-to-income ratio must be reasonable.

With so many options available in the mortgage market, it should not be too difficult for you to choose the right one provided you are able to furnish all necessary documents and keep a track of your credit score. Depending on your background, see if there are concessional APR-backed mortgages available before you apply for one.