When buying a home, mortgage rates are important! The truth about mortgage rates? They are always changing. It is wild to think that they can change from one day to the next, but it’s true.
When dealing with mortgage rates, being educated is the first step in understanding how your mortgage rate can affect you and your home buying process.

The APR (annual percentage rate) is the rate that encompasses several different rates. It can include the interest rate, potential broker fees, and points that are added to the home mortgage process. Interest rates, on the other hand, are just that: a simple percentage that you are paying monthly on the overall loan for your home mortgage. Interest rates and APRs can vary depending on if you do a fixed rate or an adjustable rate as well. It is important as rates are currently on the rise to pay close attention to your APR as well as your rate, a low rate with a high APR could be an indication of needing to shop around.
What is the difference between a fixed-rate and an adjustable rate?
Fixed rates are just that, fixed. You know the amount of the APR and interest that you will be paying when you are taking out your home loan, and you know that the loan amount will not change for the duration of your home loan. With an adjustable rate, your rate can vary depending on the length of your loan. Some adjustable rates can vary yearly and fluctuate with whatever the market interest rate is at that point in time. Your monthly mortgage payment could go up or down depending on the adjustable rate. This becomes even more popular with rising rates to start finding more adjustable-rate mortgages being offered. You will want to determine your short-term and long-term goals of how long you will be staying in the home with which you will then pick your fixed or adjustable rate mortgage.
How do you find the best mortgage rate for you?
Check with your local bank or credit union to see what offers they have going on for mortgages. Call around and be educated to see who can offer the most competitive home loan options to you. While you may want to stay with your current lender if you can find a better deal that is beneficial to you and your family, why wouldn’t you take advantage of that? Saving money is saving money.
Why do mortgage rates fluctuate?
Mortgage rates fluctuate due to several different factors. Supply and demand is large factor in the fluctuation of interest rates. The more people who are utilizing banks and depositing their funds into banks, the more money that those banks have to lend out to others for their loan needs. And when they have excess money, the interest rates tend to go down. Another factor of rates rising or changing is the Federal Reserve and the U.S. Treasury which make adjustments based off of supply and demand or inflation.
When choosing what option is best for you for your mortgage loan, consider all the factors when it comes to the mortgage rates and interest rates that you will be charged. Become educated by asking your lender and doing your research to become knowledgeable about what is most beneficial to you and your family for your home purchase. Why pay more in interest when there might possibly be other options out there for you to utilize?