How do I know if I’m getting a good mortgage rate?

Deciding to get a mortgage to finance a home is a big decision to make and probably one of the most important investments you’ll make. It’s totally normal to have some hesitations prior to making such a large decision.

Like any big decision, you’ll want to know everything you can about the purchase to help you be a confident buyer. Getting educated on the different loan types, their benefits, and their rates will help you choose the best option for your budget and lifestyle.

Do you want to learn more about mortgage rates? Get in touch with a mortgage expert at Owning or start your pre-approval application today!

How are mortgage rates determined?

Your mortgage rate is determined by several factors. Some of these factors are things you can control and others you cannot.

Mortgage rate factors you can’t control:

A part of your mortgage is determined based on the current housing market, which is something that can be pro-buyer or pro-lender, this is where terms like “a buyer’s market” originates from. When the economy has slowed down, mortgage rates tend to decrease. However, during inflationary periods rates increase as the price of most items rises.

Mortgage rate factors you can control:

Luckily, your mortgage rate is something that you can have a say in. Lenders look at your creditworthiness and loan-to-value ratio to determine if you’re a good candidate for a home loan.

Your loan-to-value ratio is how much value is in your potential new home versus the loan amount. If you have a high percentage of money owed, then your lender may consider your loan risky and your mortgage rate could end up higher.

Can my credit score impact my mortgage rate?

Having a high credit score gives you a lower mortgage rate because it shows lenders that you have a history of paying back loans and making on-time payments. If your credit score is on the low end, then try working to raise it prior to applying for a mortgage.

Here are a few ways you may be able to get your credit in good health*:

  • Make all payments on time
  • Pay more than the minimum monthly payment
  • Keep your credit usage low
  • Keep credit accounts open

Does the type of loan I’m getting change my rate?

There are many types of mortgage loans available for homebuyers, and depending on the loan that you get, your rate can be higher or lower. All loans come with some requirements, but some are more lenient than others, or have lower standards. However, there are times that loans with lower standards come with a higher mortgage rate.

The best course of action is to work with a lender or loan officer to better understand your options. Common mortgage loan types and their details are as follows:

Mortgage Loan Type: Rate Information:
ConventionalRate depends on down payment and credit score
Fixed-RateRates remain the same throughout the life of the loan
Adjustable-RateTypically starts with a low rate,
but will adjust over time depending on market conditions
VAUsually have lower rates, but you must meet special requirements
USDARates tend to be lower, but you must meet special requirements
FHAUsually lower rates,
and is a good option for buyers with lower credit scores

It’s a good idea to research each mortgage loan type to better know which one will fit your needs. Having a knowledgeable expert to help you make the best decision is always a good idea.

Are you considering a home in California? Take a look at our California mortgage calculator to better understand how much home you can afford in The Golden State.

Can I speak with an expert about my mortgage rate?

Rates can vary and depend on a variety of factors. Understanding mortgage rates and the overall process to getting a home loan can be a challenge for Also, working with a mortgage expert will help you get specific answers to specific questions. You can give us a call at 833.934.7283 or connect with us online.

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

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply. 

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Owning does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Owning. Owning and its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.

Owning has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture or any other government agency.