Current Mortgage Rates Today in Union County, Florida

Your lender offers a lower interest rate, knowing you share part of the risk with them. On the other hand, adjustable-rate mortgages offer an initial teaser rate that changes with prevailing market conditions. The initial rate remains fixed for the first few years.

Are you a first-time homebuyer? Learn more about the available FHA home loan options in Union County, Florida

Which Factors Drive Mortgage Rates Today?

Different market and personal qualifying factors affect mortgage rates' determination. Working consistently on your qualifying factors can help you qualify for lower mortgage rates.

Typically, lenders use your qualifying factors to determine your risk level. If you have a better credit history, you're more likely to get better rates.

On the other hand, you can't do much about market factors. The overall economic outlook affects changes witnessed in mortgage rates. When it is doing well, rates tend to be higher. During such periods, borrowers can afford more hence the higher rates.

However, when the economy seems bleak, rates will fall. The falling rates make it more affordable for borrowers to get mortgages. Here's more insight into how market factors influence mortgage rates.

The Federal Reserve

Many borrowers believe that the Fed determines mortgage rates. While this assumption is false, the Federal Reserve influences mortgage rates today. The Fed typically controls short-term interest rates. The economy's state determines whether these rates will increase or decrease. As the fed rate changes, mortgage interest rates follow suit.

Reins on the fed rates help the Fed to control the money supply in the economy. These short-term rates determine how banks borrow money to lend out. A struggling economy forces the Fed to lower its rates.

Fed rates rise when the Fed needs to tighten the money supply. Banks and lenders will change mortgage interest rates to remain in tandem with the Fed rates.

The Bond Market

Stock traders usually buy and sell mortgage-backed securities. These bonds offer a safety net for traders, especially when the market is volatile. The demand for the bonds will, in turn, affect mortgage interest rates.

When the stock market is struggling, the demand for mortgage bonds increases. In these instances, mortgage rates increases. As the demand falls, mortgage rates follow suit.

Inflation

It is challenging to separate inflation from mortgage interest rates. Usually, high inflation rates cause interest rates to soar. The rates typically increase to keep up with the dollar's value. Rates will only drop when inflation decreases. However, the rates might stay the same during low inflation periods.

Besides these economic factors, personal factors will also influence how much you'll pay as interest. Lenders usually offer better rates for clients with better qualifying terms. However, if you are a riskier client, you'll have higher interest rates to make up for the risk.

Here's more insight on how your qualifying factors will influence your mortgage rates.

Loan Type

Lenders will also need clarification about whether you're a first-time or a seasoned borrower. They'll also ask if this is your first or second mortgage. Taking out a second mortgage typically affects your mortgage rate.

Most borrowers will prioritize their first mortgages even when they experience financial difficulties. These loans will earn you a lower interest rate. Lenders will give you slightly higher mortgage rates on second mortgages, which have higher risks.

If you must have a second mortgage, consider the cash-out refinance. This loan option gives you equity depending on your first mortgage while offering a lower rate.

Loan Program

When you start scouting for your dream home, you should keep your preferred loan type in mind. Different loan programs come with specific interest rate requirements. You will have a higher or lower interest rate depending on the loan's qualification requirements.

Generally, conventional loans have higher credit scores and down payment requirements. These requirements make it difficult for low-to-middle income clients to qualify for them. However, borrowers who qualify for these loans get better mortgage rates.

The government-backed FHA mortgages have lower qualifying requirements. You don't need a high credit score or low DTI ratio to qualify for the FHA loan. As a result, expect slightly higher mortgage rates than those of other government-backed loans.

Veterans and surviving spouses can purchase their dream homes thanks to VA mortgages. These loans pose less risk to lenders and have slightly lower mortgage rates.

The USDA mortgages will suit you if you consider finding a home in a rural setting. You'll have significantly lower interest rates with this loan option. On the other hand, Jumbo loans have higher interest rates which depend on market conditions.

Credit Score

Your credit score offers a clear reflection of your loan history. Lenders will assess this score to determine whether you pay your bills promptly. Besides, your credit score reveals whether you're a responsible borrower or will default on your mortgage payments.

Lenders usually view you as a low-risk borrower if you have a high credit score. In these instances, your lender will give a low-interest rate. However, a lower credit score translates into a higher interest rate. Borrowers with low credit scores are at a higher defaulting risk.

It is always helpful to determine your required credit score based on the loan program you'll settle on. If you opt for a conventional loan, most lenders will require a credit score of 620. You can qualify for FHA or VA loans with a credit score of 580.

Working consistently to improve your credit increases your chances of getting lower mortgage rates today.

Down payment

Investing a significant amount in the home usually indicates that you are more likely to complete your loan on time. Lenders always want to know that you're invested in the home.

Home Occupancy

Before setting your mortgage rates, lenders must also know whether the home is your primary residence or investment property. Purchasing your primary residence usually attracts the lowest interest rates. Lenders will offer you low-interest rates assuming you have a higher commitment to clear your mortgage. Essentially, no one wants to lose where they call home.

Lenders will attach some risk to you if you're buying a second home or an investment property. In such instances, you might default on your mortgage payments when you experience financial difficulty.

Location

Your state might influence the mortgage interest rates that your lender charges. You might also want to partner with local lenders to help you get up to speed with your state's mortgage rates. Shopping around gives you an overview of what to expect with local rates.

Once you understand your state's base rates, you can quickly work on finding the best bargain. Besides the location, your home's price also influences mortgage interest rates. Assess your area's price ranges to know the typical rates in your preferred neighborhoods.

Loan-To-Value Ratio

Most lenders also compare your down payment to your total loan payment. This loan-to-value ratio reveals your risk exposure. Typically, you'll get a higher LTV if you pay a small down payment amount. Borrowers with such ratios pose a higher risk to their clients.

Lenders usually assume you're more likely to default on the loan if you pay a smaller down payment. Besides, you might neglect your mortgage payments when you experience tough economic times.

On the other hand, a lower LTV ratio ensures that you get higher interest rates. With a high down payment, the assumption is that you'll remain consistent with your mortgage payments regardless of the prevailing economic conditions.

What has Affected Mortgage Rates Today?

The factors discussed below will help shed some light on why mortgage rates are where they are today.

Fed hikes

The Fed's action or inaction can indirectly affect mortgage rates today. Typically, the Fed increases or decreases its rates to help address the current economic outlook. Lower Fed rates usually enable banks to offer cheaper loans. On the other hand, the Fed could increase its rates to curb inflationary pressures.

Fed hikes typically cause mortgage rates to rise as lenders look to keep up with changing fed rates.

Inflation

Although inflation might not affect mortgage rates directly, it can indirectly lead to increasing mortgage rates. Typically, inflation decreases the dollar's purchasing power.

Rising inflation usually leads to higher interest rates. Besides, the demand for mortgage-backed bonds declines during these periods, increasing interest rates further. Mortgage loans become more expensive during these periods, deterring most would-be home buyers.

If there's a chance that inflation will decline, then mortgage rates can fall. However, expect interest rates to rise if the economic outlook suggests the possibility of higher inflation.

How Can You Get Better Mortgage Rates Today in Union County, Florida?

Lower is always better when considering mortgage rates. Here are some strategies you could use to get the best mortgage rates.

Pay a Higher Down Payment

Start saving for your down payment early on to raise a higher amount. Paying more during closing makes you eligible for lower mortgage interest rates. Besides, you'll also earn a low loan-to-value ratio, making you a good investment.

Are you looking for no-down-payment mortgage options? Usually, your preferred loan program will determine the down payment amount you'll need. Conventional loans require a 3% down payment, while FHA loans require a 3.5% down payment. Consider the USDA or VA home loans.

Increase your Assets

Accumulating your assets also increases your chances of getting better mortgage rates. Assets include your mutual funds, stocks, bonds, and other investments. Most lenders would want to know how much property you have before setting your interest rate.

Borrowers with more assets are less likely to default on their loans. In such circumstances, your lender views you as a low-risk borrower. As such, you will get lower interest rates.

Improve your Credit Score

A good credit score usually ranges between 670-739. However, your specific loan will also influence the credit score you need.

Find your credit report and proofread it to find any errors. Work with experienced financial advisors to ensure that the report accurately reflects your credit history. Given that this process requires some time, ensure that you start early.

Next, work on ensuring that you have the best possible credit score. Your lender would assess how well you handled previous debts.

Are you wondering how you can improve your credit score? Here's how:

• Focus on small, regular payments to save on interest in the long run. Create a reliable plan that covers your existing credit card debts.

• Reduce any high-balance accounts. Cut back on your budget to free up money to clear such balances.

• Find a debt consolidation loan. Combine all your outstanding debts into a single monthly payment with a consolidation loan. Use this loan to improve your credit utilization rates and overall credit reports.

• You could also work with a credit counseling agency to improve your credit score.

Pay Off Debt to Reduce Your Debt-To-Income Ratio

Lenders usually evaluate your debt-to-income ratio while considering your mortgage interest rates. A lower DTI ratio makes you a less-risky client, ensuring you receive a lower interest rate.

Carrying a heavy debt load could place you in an unsustainable financial situation. Lenders will set a higher rate that compensates for this risk. Paying off your debt places you in an excellent position to reduce your DTI ratio.

Sign up for Shorter Loan Terms

Opting for a 15-year instead of a 30-year loan term will save you lots of money throughout the loan term. A shorter loan term earns you lower mortgage rates upfront. Besides, you'll have an easier time building your home equity. Once you achieve 20% home equity, you can stop private mortgage insurance and reduce your monthly payments.

Borrowers with shorter loan terms pose less risk to their lenders. However, you'll have to make do with slightly higher monthly payments. The only good thing is that you'll save more in interest throughout the loan's life.

Consider Prepaid Mortgage Points

Purchasing mortgage or discount points helps you earn lower mortgage rates. Each point usually represents 1% of your loan amount. You could opt to prepay interest during closing by buying your rate down.

However, mortgage points will only be valuable if you intend to stay in the house for a long while.

Top Activities for Children in Union County, Florida

• Explore the Central Florida Zoo and Botanical Gardens - This natural wetland has plenty of rhinos, leopards, monkeys, exotic birds, and giraffes. Your young ones will love the live animal encounters and educational opportunities. The endless adventures guarantee lots of fun all day long.

• Visit the Sanford RiverWalk - Enjoy some excellent historical displays while exploring this great Veterans Park. Your kids will love scenic views of Lake Monroe along the beautiful paved trail. You'll find plenty of seating when you need to catch your breath. Your older kids could skateboard or ride through the trails.

• Explore the Expansive River on Boat Tree Marina - Enjoy incredible boat tours and water sports aboard the Boat Tree Marina. Get close to nature on a warm Florida day. See wildlife up close as you cruise the beautiful river. Rent a boat for a day and enjoy a matchless adventure throughout the day. Create memories with your young ones on Boat Tree Marina.

• Visit the Seminole Town Center - Stop by the town center and find some gifts for your new home in Union County. The Sweet Spot has excellent ice cream and cookies, which you'll all enjoy in the food court. Relish the great atmosphere with numerous dining options.

• Horseback Riding at Hidden Palms Ranch - Enjoy Florida's natural beauty as you feel the sun on your face. Enjoy one-of-a-kind adventures at Hidden Palms Ranch. Let your kids reconnect with the great outdoors on a horse's back.

Prepare Well to get the Best Mortgage Rates Today in Union County, Florida

Saving small percentages on your interest rate guarantees significant savings throughout the loan's life. Always prepare adequately, shop around, and compare offers before settling on a loan offer.