Daily Archives: December 13, 2017

The Different Types of Mortgage Rates

applying for mortgageDifferent people have diverse needs. Since mortgages are designed to meet people’s needs, they are packaged differently, each trying to meet various needs. This suggests that mortgage rates are not standard.

If you consult with a mortgage lender in Portland, you will know that borrowers with high credit scores often get lower rates. Depending on the type of loan you want, mortgage rates will vary.

Conventional mortgage rates

Mortgages by either Freddie Mac or Fannie Mae are referred to as traditional mortgages. Their securities control the prices so that the Fannie Mae rates will depend on their bonds, for instance. The most common program here is the 30-year fixed-rate in which home buyers make a 20% down payment. Bundled with the Freddie Mac and the Fannie Mae are loans like HARP refinance, Delayed Financing, and HomeReady loan.

FHA interest rates

These are rates for Federal Housing Administration-based insurance. Available all over the U.S., these loans are most preferred by home buyers who want a low down payment. The FHA requires just 3.5% as down payment. The rates are determined by the GNMA (Government National Mortgage Association) bonds. When these rates go up, the FHA loan rates drop.

VA interest rates

Also controlled by the GNMA mortgage-backed bonds, these rates tend to work alongside the FHA rates although they are often lower. When the Department of Veterans Affairs guarantees a loan, the recipients use these standards. U.S. veterans get 100% financing without the need for mortgage insurance.

The government also controls USDA interest rates, which are for borrowers in the suburban and rural areas all over the country. They are guaranteed by the government, which allows you to enjoy a rates discount. Whatever the case though, mortgage rates will be unpredictable. However, if you know them, you at least stand a better chance to get the lowest rates possible.