The loan-to-value ratio (LTV)
The loan-to-value ratio (LTV) measures how much you have borrowed relative to the value of your home. It's expressed as a percentage, which is crucial because it affects the interest you pay on your mortgage. The higher your LTV, the higher your monthly payments will be.
The formula for calculating LTV is pretty simple: take the amount owed on your mortgage and divide it by the house's value. So, if you have $200,000 worth of equity in your home and owe $150,000 on your mortgage with an interest rate of 4%, those numbers would look like 150/200 = 0.75 or 75%.
The size of your down payment also affects the interest rate you'll be charged. The higher the down payment, the lower your monthly payments will be, and the less risk there is for the lender.
For example, if you put $10,000 down on a $100,000 house instead of putting no money down, your monthly payments will be much lower because you're paying a smaller portion of the loan—thus taking less risk on yourself as the borrower.
On top of that, lenders must pay their staff and keep their business open; they make money by charging mortgage interest rates. So, if they lend at an interest rate that's too high (or doesn't cover these costs), they have to charge more in fees or risk losing money overall.
This is why a lender might require more than 20% of what's owed before it will approve your mortgage application: They want some assurance that if something goes wrong with your finances later on down the road—such as unemployment or medical emergencies—you won't default on your payments.
Credit scores are a measure of your creditworthiness. They're based on factors such as payment history, types of credit used, and how long you've had credit. Credit scores affect interest rates in two ways:
Interest rates depend on the loan program
Conventional loans are the most common type of mortgage. They're based on a borrower's credit score and how much money they can afford to put down at closing.
Government-backed loans, such as FHA, VA, or USDA mortgages, have lower interest rates than conventional loans because they do not require a down payment or require debt-to-income ratios to be met. Instead, these types of mortgages may consider factors like the borrower's length of employment and income stability to determine whether they qualify for these programs.
For example, the difference between the interest rates on conventional and FHA loans can be as much as .5%. This is because the FHA program is designed to help homebuyers with lower credit scores.
Conventional loans are also known as "non-government backed" mortgages. These loans are for borrowers with good or excellent credit scores, at least two years' worth of steady employment history, and plenty of cash reserves (at least 20% down payment).
If you don't meet these criteria, you may want to consider government-backed programs like:
VA loans are designed specifically for veterans; no down payment is required if you qualify. Borrowers must have a Certificate of Eligibility showing they served in active duty during wartime or peacetime. There are restrictions on eligibility based on discharge type - whether an honorable discharge or not, but most people who served in any branch qualify.
- USDA Rural Housing Loans – Guaranteed by USDA Rural Development (RDA), which provides technical assistance to rural communities to improve housing conditions in rural areas where few resources are available or private lenders won't lend money.
The term of your loan will be determined by how long you plan to stay in your home. If you want to keep your mortgage payments as low as possible, consider a longer-term loan with lower interest rates. This can help save you money throughout the payment period, but it will be more expensive overall.
If you think you'll need to sell or refinance before paying off all of your principal, then go for a shorter-term loan with higher interest rates so that each payment is smaller and easier to manage.
Generally, shorter loan terms come with lower rates, while long-term loans have higher rates and longer repayment schedules.
Longer loan terms reduce your monthly payment but increase the total amount you pay in interest over time—meaning you'll end up paying more for a house than if you got a shorter-term loan. Shorter-term mortgages mean higher monthly payments but lower overall costs because they require less interest to be paid back over time.
If you expect to sell your home before the end of a 30-year mortgage, then getting a short-term (15-year or less) mortgage could save you some money on interest payments and allow for an earlier payoff date on your loan balance.
Down payment amount
Down payment is the amount of cash you contribute to purchasing your home. The down payment amount, which is a percentage of the home's purchase price, is a factor in determining mortgage interest rates and other loan terms.
The more you spend on a home, the less you'll have to borrow from a lender. This means you'll pay less interest over time (more on this later). If you can afford it, paying more than 20 percent of your purchase price at closing will bring many benefits:
Home price is one of the factors that determine your mortgage rate today. It's often the most significant factor, too. If your home is worth more than other houses in your area, you will have to pay more interest on your mortgage and thus higher monthly payments.
On the other hand, if your home sells for less than other homes in your area with similar features and amenities, you could qualify for lower rates and better deals on refinancing or buying a new property with cash-out loans.
Home prices are determined by many factors, including the location and condition of the house. The more desirable a house is to buyers (and renters), the higher its price will be because there's more competition among people who want an opportunity to live there!
While each lender has its criteria for determining the appropriate interest rate, the following factors are common to most lenders:
- Property value
- Property type
- Property condition
Top Cities in Bradford County, Florida, to buy a home at low rates
If you're looking for the best cities in Bradford County to buy a home, here are a few of our top picks:
Starke – Besides being home to Florida's first county courthouse, this city also boasts many parks, recreation centers, and an 8-mile walking trail. It has numerous nearby lakes and rivers that are perfect for fishing or kayaking!
Lawtey – If you're looking for something more rural than Starke but still within proximity of Jacksonville, then consider moving here instead. This town has many historic homes on its streets that date back hundreds of years! Plus, it offers plenty of outdoor activities such as horseback riding at nearby stables or hiking through beautiful trails.
- Hampton – This is another smaller town where you'll find plenty of opportunities to enjoy nature while living close enough yet far enough away from Jacksonville without having to pay big city prices! If home ownership isn't quite in reach yet but would love some time off from work now and then—you might consider renting instead!
Types of Mortgages with the best rates in Bradford County, Florida
There are several types of mortgage loans available.
FHA loans are an option for first-time homebuyers or those with lower credit scores. FHA mortgages require a down payment of 0 % to 10%.
VA loans for veterans and active military personnel only. VA mortgages require no down payment, so long as the borrower has sufficient funds in their bank account to cover closing costs.
- USDA loans designed for rural borrowers purchasing homes in designated rural areas as determined by the U.S Department of Agriculture (USDA). USDA loans typically require little to no down payment and sometimes even allow borrowers to finance 100% of their purchase price!
Loan terms may be as short as 1 month up to 10 years, with the most common loan term being 30 years
Your lender and their underwriting guidelines decide loan terms. Loan terms may be as short as 1 month up to 10 years, with the most common loan term being 30 years. If you've been denied in the past or have bad credit, you'll likely need to get a 15-year mortgage.
They're based on your income and assets, your credit score, and other factors such as whether or not you have enough cash for closing costs and what type of property (i.e., refinance vs. purchase).
Mortgage rates today can either be fixed or variable
Mortgage rates today can either be fixed or variable (more on below) and are decided by the lender. The lender sets mortgage interest rates, not a government agency like the Federal Reserve Bank.
Most mortgage rates today in Florida are variable interest rate loans, meaning they can change anytime. A fixed-rate mortgage has an initial set loan period that remains unchanged throughout its term. This means that if your loan was fixed at 5% for 3 years, you know that your payments will be exactly $990 per month until those three years are up—and then they'll adjust.
Fixed-rate loans usually carry higher monthly payments because lenders charge a premium to guarantee their interest rate won't change during that period; you're paying off your home loan.
The mortgage rates you can qualify for today will depend on various factors but ultimately be based on your credit scores
Your credit scores are determined by several factors, but the most important is your credit report. Your credit report records your past borrowing behavior and payment history, including any late payments or debts you have paid.
The higher your score, the more likely you will be approved for loans at lower interest rates and with better terms.
Lenders want borrowers to have little debt relative to their income
The debt-to-income ratio measures how much debt you have compared to how much income you make. The higher your DTI, the more likely lenders will view you as a higher risk. That's because they don't want to lend money to someone who might be unable to pay them back.
Lenders are looking for a DTI of less than 43%, but some mortgage lenders allow a DTI as high as 50% on certain types of loans. If you have excellent credit and can prove that your income puts you above the minimum requirement for homeownership, many lenders may lower their required debt-to-income ratio even further (as low as 25%).
In the past, most mortgages were fixed-rate mortgages (FRMs). These loans have an interest rate that does not change over time. An FRM might be a 30-year fixed-rate mortgage or a 15-year FRM with payments based on level monthly payments for 15 years followed by an extra payment every year for 5 years.
Over time, your interest rate stays the same, so you know exactly how much money you will have to pay each month throughout the life of the loan. You also know how much money it will cost when it comes time to pay off your home at closing; there aren't any surprises down the road!
5 Great Activities for Children in Bradford County, Florida
Bradford County, Florida, is full of activities for children, from parks and museums to historic sites. Here are five of the best places to take your kids in Bradford County, Florida:
Fort Mose Historic State Park
This historic site, located in the heart of the Florida Panhandle, is a must-see for visitors. The park is home to a two-story Spanish Colonial fort built by escaped enslaved people and Native Americans as a refuge during the early colonial period.
Visitors can tour this historic structure and enjoy activities such as hiking, fishing, and canoeing on the grounds. There are also interpretive programs offered throughout the year by park staff members.
Chicken Roost Farm
The Chicken Roost Farm is a working farm in unincorporated Bradford County where visitors can see many different types of animals, including cows, goats, and chickens.
Visitors can feed these animals or watch them roam around their natural habitat as they graze in pastures or lounge around barns. The farm also offers hayrides to help with transportation around its grounds.
Little Manatee River State Park
Little Manatee River State Park offers many activities for children, such as kayaking, canoeing, and paddle boating on Lake Lillian, as well as hiking through nature trails that lead to the beautiful scenery along the river bank, where you might find alligators or turtles sunning themselves on logs!
Boyd Hill Nature Preserve
Boyd Hill Nature Preserve is a beautiful place to take the kids and enjoy nature. Several trails wind through the preserve, providing plenty of opportunities for your kids to explore and get dirty!
Coffee Pot Bayou Park
Coffee Pot Bayou Park offers an excellent place for kids to play in the water, make friends with other children and have fun. The park has a playground, an area for fishing, a boat ramp, and plenty of other things to keep you busy all day long.
Mortgage rates today are based on many factors, including borrower creditworthiness. Your lender will look at your income, job history, savings, and how much of a down payment you have saved up for when determining what interest rate they give you.
The best way to get started is by talking with a loan officer from your local bank or credit union. They can help you determine which type of mortgage will work best for your situation.