Applying for a Loan

Market Conditions

When the Federal Reserve Board raises or lowers rates; there is usually an impact on the rate you will get for your fixed rate home loan. The Federal Reserve adjusts federal funds rate, which is the rate at which banks lend to each other. When federal funds rate decrease, we spend more, which can actually increase inflation. Mortgage rates tend to be longer-term rates that are affected by inflation, as well as other economic indicators like job growth. So it's more accurate to say that mortgage rates are indirectly affected by the Federal Reserve Board, and more directly affected by what happens every day in active public markets. The market sets the interest rate, and then a margin is added to the index to determine your final mortgage interest rate.

Timing

Since interest rates change daily, the longer a lender locks in a rate, the higher the risk that the market will move against them. Therefore, you pay more (in points) for a longer guarantee. If interest rates appear to be on an upswing, it makes sense to lock in your rate. If they are steadily dropping, it makes sense to float your interest rate so that you can take advantage of a shorter lock-in period, saving you money.

Points

You can often receive a lower mortgage interest rate by paying extra points - mortgage costs that are up-front rather than built into the interest rate. Each point equals one percentage point of the total amount of the loan. For example, one point on a $100,000 loan is the equivalent of paying $1,000 to ensure you get a lower interest rate that saves you money over the life of your loan. We make it easy for you to find just the right home loan for your needs no matter what your credit history, current home loan amount, or mortgage goals. The information provided below will give you a helpful start to finding the answers for your home financing needs.