Current Mortgage Rates Today in Washington County, Florida

A Brief Overview of Mortgage Rates Today

If there’s a heaven for mortgage borrowers, it’s likely full of smiling, altruistic lenders that charge zero interest rates. Sounds lovely, right?

But on this planet, most lenders can’t afford that luxury. After all, they need to make money and manage risks simultaneously. And the best way to do that involves charging interest, i.e., mortgage rates.

Generally, two types of mortgages are available today - fixed and adjustable. As the terms suggest, fixed rates don’t change throughout a home loan’s lifetime. Conversely, adjustable rates vary periodically, at monthly or yearly intervals.

Picking an appropriate mortgage category can be confusing. But you can avoid unnecessary complications and problems in the future by basing your decision on your income.

If you earn a stable income that shows few signs of increasing dramatically soon, consider taking out a mortgage with fixed rates. This option is predictable, and it makes budgeting a breeze. But if you expect earnings to bump in the future because, for instance, you completed an additional course or are due for a promotion, adjustable rates may be what you seek.

The Rise and Fall of Mortgage Rates in the US

Diving into the essence of mortgage rates today without briefly exploring their history is unfair. That is more so since there’s much to tell about them.

Although Freddie Mac’s quest to survey mortgage lenders began in 1971, we can safely assume that the concept of rates came with the introduction of mortgages in the United States in the early 1930s.

But mortgage rates as we know them are less than a century old. Records show they started high, hovering between 7.29% and 7.73% in 1971. And more bad news followed. Inflation spiked in this period, and mortgage rates followed suit, hitting a historical high of 18.45% in the early 1980s. What a time to be alive!

But things eventually evened out, with sporadic pops and fizzled manifesting here and there. By the early 2000s, mortgage rates hovered around the 8% mark. Then they pushed farther down and finally settled at the 5-6% range.

The mortgage rates today in Florida are around 5.1%, 4.4%, and 5.2% for 30-year fixed, 15-year fixed, and 5/1 ARM mortgages, respectively. Since Washington County is located in the Sunshine State, its percentages should be close to these numbers.

What Drives Mortgage Rates Today?

The following typically determine mortgage rates in the US:

The Federal Reserve

The Federal Reserve has several vital roles. These include maintaining a dependable and functional payment system, keeping bank operations in check, and formulating monetary policies. Let’s discuss the last responsibility: developing policies.

Several tools help the Fed to establish suitable monetary policies, the federal funds rate among them. The federal funds rate is fundamentally the interest that financial institutions charge each other when they lend or borrow additional reserves overnight.

Sometimes, the Federal Reserve discourages banks from borrowing by raising the federal funds rate. This institution often does that in a bid to tamper with inflation. And when it does that, financial institutions respond by passing on the extra costs to consumers through strategies like increasing interest rates.

So, if there’s ever a good time to enjoy substantially lower mortgage rates, it’s when the Fed’s target fund rate is significantly low.

The Prime Rate

Did you know that banks charge large corporations and other creditworthy entities different rates than everyday borrowers? That right. Creditworthy customers often attract what experts call prime lending rates.

Now, the Federal Reserve doesn’t set the prime rate. This role is exclusively at the discretion of individual financial institutions. However, the Fed’s fund rate influences the prime rate to a large extent. When the federal funds target rate shoots, prime rates follow suit, and vice versa.

And when prime rates change, mortgage rates can be affected indirectly. That is especially true for adjustable-rate mortgages, whose rates fluctuate after the introductory period. But prime rate trends generally have little to no effect on fixed-rate home loans.

Mortgage-Backed Securities

Mortgage-Backed Securities, known as MBS, are bond-like investments consisting of several real estate loans purchased from the original issuers. They are usually bought by investors looking to collect monthly mortgage payments on behalf of the actual lenders.

Residential mortgage rates today have a peculiar relationship with mortgage-backed securities. When the latter’s costs dip, lending institutions increase mortgage rates. Why? Mortgage providers lose significant amounts when borrowers take out home loans while the market wallows.

Inflation

No surprise here. Inflation affects the prices of everything, ranging from food and gas to housing and mortgage interest rates. Inflation and mortgage rates move in tandem- when one soars, the other follows in tow.

If you wonder how inflation affects mortgage rates today, consider this example. In an era of runaway inflation, the Federal Reserve can control the situation by increasing the federal funds rate. And as we discussed earlier, a higher federal funds rate is associated with rising mortgage rates.

The last few months are a fitting case in point. Recently, soaring inflation forced mortgage rates to jump from around 5.3% to 5.51% within less than a week!

How Do Lenders Determine Individual Mortgage Rates?

Now that we’ve addressed the primary determiners of mortgage rates in the United States, let’s narrow things down to individual cases. Here are several factors that determine the offers you’ll likely get from a mortgage company or any other relevant lender.

Loan Type

Mortgage loans come in a variety. Today, several options are available in the market, including government-backed, fixed-rate, and adjustable-rate mortgages.

Government-backed mortgages arguably have the lowest interest rates of all the home loan options available. Take the solutions backed by the Federal Housing Association (FHA) as an example. As we speak, a 30-year FHA loan comes with a 4.82% mortgage rate. VA (Veterans Affairs) loans, too, attract reasonably low mortgage rates, with the average for a 30-year VA refinances being 4.85%.

Both fixed-rate and adjustable-rate home loans have higher interest rates than government-backed mortgages. But generally, institutions charge less for adjustable-rate mortgages (ARMs), more so in a falling-rate environment. However, the situation may reverse when circumstances force lenders to hike interest rates.

So, if you want to enjoy the best rates, pay close attention to the mortgage you pick.

Credit Score

Again, no surprise here. Most financial institutions use your credit score to assess your creditworthiness and decide if you are eligible for credit cards, consumer loans, auto loans, etc. Why wouldn’t they use the same to set reasonable mortgage rates?

Let’s cut to the chase: when it comes to your credit score, a difference of approximately 100 points can save (or cost) you thousands! Do we have your attention now?

Your credit score indicates your ability and dedication to repay loans. Therefore, if your points are low, institutions assume you are high-risk and try to protect their investment using a higher mortgage rate.

And that is in the best-case scenario. In extreme cases, some lenders will flat-out say no and send you home empty-handed.

Loan Amount

If you live by the go big or go home rule, we may have some bad news: you may have to pay extra for larger home loans. Why? Jumbo loans are, by and large, harder to sell. And this feature makes them costlier to lenders, who try covering their backs by cost-sharing with customers. So, a jumbo mortgage equals a higher interest rate.

But you can dodge high mortgage rates by opting for bad home loans, right? Not really.

Remember, the lenders pay certain fixed costs when obtaining and managing smaller mortgages during repayment. And consequently, they pass them down to borrowers through slightly higher interest rates.

Lender Relationship

Your relationship with a financial institution is an integral factor that determines many things, including loan approval and mortgage rates. But don’t rush out and propose to your lender just yet. We are not talking about that kind of relationship here, but rather one revolving around finances.

Most institutions extend juicy offers to loyal clients with sizable account balances. They usually use that to appreciate valued customers and bolster retention rates.

So, if you have an untainted, well-founded relationship with your lender, you may be eligible for a mouth-watering loan package with reduced interest rates!

Occupancy

What are your plans for the property you are about to buy? Do you want to live in it as your principal residence? If you don’t, maybe you’d like to use it as a second home, and winter or summer there. And if that is out of the question, perhaps you want to convert it into an investment property and earn from it.

Either way, occupancy determines the mortgage rates you’ll get.

Most lenders will require you to part with less interest where a principal place of residence is concerned because you are less likely to risk losing your home over unpaid payments.

On the other hand, they charge higher mortgage rates for second homes and investment properties because, according to experts, borrowers are more likely to stop paying for them when times get hard.

Down Payment

Last but not least is the impact of the down payment on your mortgage rate.

Putting money down on the house is highly advisable because it leads to several benefits, including lower monthly payments and higher chances of clearing your loan sooner. That is why most experts advise prospective home buyers to pay around a 20% down payment.

You are likely thinking, hold on, isn’t that a bit much? Probably. And we know how raising that much can be challenging in this era. But hear us out. The more you put down now, the less you’ll have to pay later. Why? Lenders often associate larger down payments with reduced risks and attach lower mortgage rates to them.

To summarize, buckle up and prepare to pay a larger down payment if you want to enjoy less interest over your mortgage’s lifetime. And if you can manage to put down 20% or more, all the better; lower rates will be yours to relish.

Is There Anything You Can Do to Get Better Rates in Washington County, Florida?

If better mortgage rates seem far beyond your reach, don’t give up just yet. The good news is that there are several hacks you can use to ensure you are in a position to enjoy the best rates when the time is right. These include:

Improve your credit score

Since mortgage lenders treat credit scores like the holy grail, your best shot at getting better rates starts with more points. In simpler terms, if you want to enjoy lower mortgage rates today, work on your credit score. And you can do that by:

• Reviewing your credit report and contesting any errors

• Chipping away at revolving debts

• Covering all bills in good time

• Keeping credit utilization as low as possible

• Avoiding multiple credit applications

Save for a larger down payment

Scrounging up enough to cover a 20% down payment or more can be a walk in the park for people raking in huge sums. However, to the average American who’s barely making enough to live on, it can be an unsurmountable, uphill task.

But don’t worry. If your earnings are somewhat meager or ok at best, you can still afford to put down a reasonable amount, provided you’re ready to buckle down and bolster savings.

Increasing income streams is one of the hacks you can use to ensure you save enough to cover a larger down payment. And you can do that by getting a second job or starting a small side gig like offering food delivery services.

Not to forget, current expenses also affect the sum you’ll have at your disposal when it’s time to pay a down payment. Don’t downplay this tip. Remember Benjamin Franklin’s priceless advice: beware of little expenses; a small leak will sink a great ship.

So, avoid unnecessary costs and divert the money towards your down payment savings.

Shop Around

Many lenders are actively serving Washington County residents. And to attract more clients and outshine their competitors, many are charging lower-than-average mortgage rates. Do you see where this is going?

Don’t settle for the first mortgage company or bank that comes your way. If possible, walk into three or more institutions, enquire about their interest rates, and compare findings. The chances are high that you’ll unearth a lender that charges considerably less than the rest.

And if the legwork seems nightmarish, here’s something to motivate you. A lower interest rate leads to significant savings in the long run. Picture paying 1% less on a mortgage worth $300,000. You’ll be saving around $3,000 per month! Multiply that with the repayment period, and you are this close to buying another house.

Living in Washington County, Florida - Is it a Good Idea?

Buying property in Washington County and enjoying juicy mortgage rates is all well and good for you, but what about your kids? After all, there’ll be living in the area too.

Luckily, Washington County is an excellent place to raise kids. Why? This area has countless spots, facilities, and areas for young people that love enjoying the following:

• Swimming - Kid-friendly swimming areas in Washington County include Boat Lake Swimming Park, Falling Waters State Park, and Three Rivers State Park.

• Cave tours - Washington is home to the only state park in the Sunshine State that offers cave tours: Florida Caverns State Park. And the good news is that kids aged 10 and above are allowed on these tours.

• Riding trains - Choo-choo! What’s that in the distance? The trains at Veterans Memorial Railroad are located in the heart of Washington County. And this fun spot is open to kids!

• Skating - What comes to mind when we mention Skate Factory? Tons of fun sounds about right. Skate Factory is one of the coveted skating areas in Washington County. Tons of fun sounds about right.

• Appreciating art - Is your kid an art fan? If yes, there’ll be love the exhibits in trendy, kid-friendly spots in Washinton County, including Panama City Center for the Arts.

Getting Better Mortgage Rates Today in Washington County, Florida

Life is short and unpredictable. So, if you’ve been juggling buying a home in Washington County, maybe you should close your eyes, cross your fingers, and go for it!

That is, assuming you’ve gone through everything we have discussed above and are ready to make an informed decision. Cheers!