What is The Mortgage Rate?
When you borrow the money or take a loan, you agree to repay the loan at a certain interest rate. It's one of the most important factors to consider determining how much a loan will cost you. As the borrowers pay back over a specified period called the term, the interest rate is assessed as per the life of the loan. Usually, each repayment installment comprises principal and interest.
Factors Affecting The Mortgage Rate
The mortgage rates are majorly determined by economic forces that affect the bond market. Therefore, bad economic or global political circumstances can push mortgage rates lower whereas good news can drive interest rates higher. Lenders set their base interest rate according to the risk they comprehend for an individual loan.
Borrowers and Mortgage Rates
As a borrower, you can’t do anything much about it instead of focusing on the following aspects:
Your credit score
Amount of down payment
The greater your down payment and the higher your credit score, the more chances of you enjoying the lower mortgage rate.