How to compare mortgage rates & increase purchasing power

Whether you’re a first-time homebuyer or a seasoned vet, you’ll want to get the best rate possible for your mortgage. One of the best ways to get a rate that makes the most sense for your budget is to make lenders compete for your business. Comparing mortgage rates between lenders enables you to potentially save* on your mortgage. Also, if you’re able to secure a lower rate, you can increase your overall purchasing power.

Check out our chart below to better understand what different levels of purchasing power could look like.

If you’re ready to get a rate quote, you can start your online application with Owning right now. Our application only takes about 15 minutes, and you could have a mortgage rate quote and payment structure when you’re finished.

How can mortgage rates impact home purchasing power?

Mortgage rates can have a significant impact on how much home you can buy.

Here’s how:

• Affordability: Higher mortgage rates increase the monthly mortgage payment, which can reduce your purchasing power
• Interest paid: Higher mortgage rates mean that you’ll pay more interest over the life of the loan. This can impact your ability to build equity and achieve long-term financial goals.
• Loan approval: Higher mortgage rates can also impact loan approval, as lenders may be less likely to approve a loan if the monthly payment is too high relative to the borrower’s income.
• Home values: High mortgage rates can also impact home values. Some buyers may be priced out of the market, which can reduce demand and ultimately lower home prices.

Take a look at the table below to see what happens when mortgage lenders compete. By shopping around and finding a lower mortgage rate, it’s possible to increase your overall buying power by amounts ranging from about $10,000 to over $20,000 depending on various factors that impact the mortgage agreement.

Should I compare mortgage rates when home shopping?

Yes, it’s a good idea to compare mortgage rates when home shopping. A mortgage is likely to be the biggest debt you’ll ever take on, so it’s important to get the best possible interest rate. Even a small difference in interest rates can have a big impact on the total amount of interest you pay over the life of the loan.

When shopping for a mortgage, consider getting quotes from multiple lenders. You can compare the interest rates, fees, and terms of each loan to find the best option for your needs. Keep in mind that the lowest interest rate may not always be the best deal. Some lenders may charge additional fees or have less favorable terms.

It’s also a good idea to check your credit score before applying for a mortgage, as this can impact the interest rate you’re offered. If your credit score is low, think about taking steps to improve before applying for a mortgage.**

How can I compare mortgage rates from different lenders?

To compare mortgage rates from different lenders, you can follow these steps:

• Research different lenders: Look for banks, credit unions, and other financial institutions that offer mortgage loans. You can search online or ask for recommendations from friends and family.
• Get quotes from multiple lenders: Once you have a list of potential lenders, request quotes for a mortgage loan. Be sure to provide the same information to each lender, such as the loan amount, down payment, and credit score, so that you can compare apples-to-apples.
• Compare interest rates: Review the interest rates offered by each lender. Keep in mind that the interest rate is just one factor to consider, as there may be other fees and charges that can impact the overall cost of the loan.
• Look at fees and closing costs: Ask each lender to provide a breakdown of the fees and closing costs associated with the loan. These may include appraisal fees, origination fees, and title insurance fees. Be sure to factor these costs into your comparison.
• Consider the loan terms: Look at the length of the loan, as well as any adjustable rate features. Consider how these terms will impact your monthly payments and overall cost of the loan.
• Ask for recommendations and read reviews: Talk to friends and family who have recently obtained a mortgage loan to get their recommendations. You can also read online reviews of the lenders you’re considering to get a better sense of their reputation and customer service.

By following these steps, you can compare mortgage rates from different lenders and find the best option for your needs.

What’s the difference between APR & mortgage rate

When shopping for a home, it’s important to remember that the mortgage rate is different from the loan’s annual percentage rate (APR). This applies refinancing and taking out a new mortgage, but what’s the real difference between the two numbers that you’ve likely seen when researching a mortgage? Definititions and differences for mortgage rate and APR are as follows:

• Mortgage rate is the rate of interest charged by a mortgage lender, and is shown as a percentage.
• APR is also the cost a borrower pays to borrow money, but it includes all the additional fees. Just like a mortgage rate, the APR is also shown as a percentage. APR includes other fees like PMI (private mortgage insurance), most closing costs, discount points and origination fees.

The APR is included to give borrowers more information about what they’re paying for their mortgage. The Federal Truth in Lending Act states that every mortgage agreement includes the APR and true cost of the loan up front. All lenders must follow the same rules and have to disclose APR. Borrowers should look to compare APR as their basis for home shopping to better understand the costs.

Why do different lenders have different mortgage rates?

Different lenders have different mortgage rates because they each have their own business models, risk profiles, and cost structures. Here are some factors that can contribute to differences in mortgage rates between lenders:

• Business model: Lenders may have different business models, such as direct-to-consumer or wholesale lending. These models can impact the cost structure of the lender. This can also affect the mortgage rates they offer.
• Risk profile: Lenders may have different risk profiles and risk appetites. For example, some lenders may be more willing to lend to borrowers with lower credit scores or higher debt-to-income ratios, but they may charge higher interest rates to compensate for the increased risk.
• Cost of funds: Lenders borrow money to fund their mortgage loans, and the cost of these funds can vary depending on the lender’s funding sources and overall financial health.
• Loan type: Different types of mortgage loans may have different interest rates. For example, a fixed-rate mortgage may have a higher interest rate than the initial rate of an adjustable-rate mortgage because the lender is taking on more interest rate risk.
• Fees and charges: Lenders may have different fees and charges associated with their mortgage loans, which can impact the overall cost of the loan and the interest rate they offer.

How can I choose a mortgage lender?

Choosing a mortgage lender is an important decision that requires careful consideration. Here are some steps you can take to find the right lender for your needs:

1. Research your options: Start by doing some research online to identify potential lenders. Check out their websites, read reviews, and compare their rates and terms.
2. Ask for recommendations: Reach out to friends, family members, or colleagues who have recently purchased a home and ask for recommendations.
3. Check their credentials: Make sure the lender is licensed in your state and has a good reputation with the Better Business Bureau.
4. Compare rates and terms: Shop around and compare the rates and terms offered by several lenders. Make sure to consider both the interest rate and the fees associated with the loan.
5. Ask questions: Don’t be afraid to ask the lender questions about their experience, the application process, and the loan terms. A good lender should be happy to answer your questions and provide you with the information you need to make an informed decision.
6. Read the fine print: Before signing any loan documents, make sure to read the fine print carefully and understand all of the terms and conditions of the loan.

By taking these steps, you can find a mortgage lender that meets your needs and helps you achieve your homeownership goals.

How can I get a mortgage rate quote today?

You’re a lot closer to a mortgage quote than you think! If you are ready to start your mortgage application you can apply today to get a quote from Owning and see if you can save. The mortgage rate quote you’re looking for is only a few clicks away! 

* Savings, if any, vary based on the consumer’s credit profile, interest rate availability, and other factors. Contact Owning for current rates. Restrictions apply.

** Owning does not provide credit counseling or credit repair services.

*** National average rates accurate as of 400000_EFFECTIVE_DATE from OPTIMAL BLUE MORTGAGE MARKET INDICES and are not advertised rates from Guaranteed Rate.

1 Above scenario assumes a first lien position, 780 FICO score, 30-day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Not all applicants will be approved.

2 Sample monthly Principal and Interest (P&I) payment of $400000_OWNING_MONTHLY_PAYMENT is based on a purchase price of $400000_OWNING_LOAN_AMOUNT, down payment of 25.00%, 30-year fixed rate mortgage and rate of 400000_OWNING_RATE_APR APR (annual percentage rate). Advertised rates and APR effective as of 400000_EFFECTIVE_DATE and are subject to change. Above scenario assumes a first lien position, 780 FICO score, 90-day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Not all applicants will be approved. The actual interest rate, APR and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Lender. Contact Owning for more information and up to date rates.

3 Above scenario assumes a first lien position, 780 FICO score, 30-day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Not all applicants will be approved.

4 Sample monthly Principal and Interest (P&I) payment of $500000_OWNING_MONTHLY_PAYMENT is based on a purchase price of $500000_OWNING_LOAN_AMOUNT, down payment of 25.00%, 30-year fixed rate mortgage and rate of 500000_OWNING_RATE_APR APR (annual percentage rate). Advertised rates and APR effective as of 500000_EFFECTIVE_DATE and are subject to change. Above scenario assumes a first lien position, 780 FICO score, 90-day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Not all applicants will be approved. The actual interest rate, APR and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Lender. Contact Owning for more information and up to date rates.

5 Above scenario assumes a first lien position, 780 FICO score, 30-day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Not all applicants will be approved.

6 Sample monthly Principal and Interest (P&I) payment of $600000_OWNING_MONTHLY_PAYMENT is based on a purchase price of $600000_OWNING_LOAN_AMOUNT, down payment of 25.00%, 30-year fixed rate mortgage and rate of 600000_OWNING_RATE_APR APR (annual percentage rate). Advertised rates and APR effective as of 600000_EFFECTIVE_DATE and are subject to change. Above scenario assumes a first lien position, 780 FICO score, 90-day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Not all applicants will be approved. The actual interest rate, APR and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Lender. Contact Owning for more information and up to date rates.

7 Above scenario assumes a first lien position, 780 FICO score, 30-day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Not all applicants will be approved.

8 Sample monthly Principal and Interest (P&I) payment of $700000_OWNING_MONTHLY_PAYMENT is based on a purchase price of $700000_OWNING_LOAN_AMOUNT, down payment of 25.00%, 30-year fixed rate mortgage and rate of 700000_OWNING_RATE_APR APR (annual percentage rate). Advertised rates and APR effective as of 700000_EFFECTIVE_DATE and are subject to change. Above scenario assumes a first lien position, 780 FICO score, 90-day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Not all applicants will be approved. The actual interest rate, APR and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Lender. Contact Owning for more information and up to date rates.