- Posted by: steve
- Category: mortgage rates
Are you planning on applying for a mortgage rate for your FL home? Don’t miss out on everything you need to know about mortgage rates in Florida.
Buying a home can be a difficult process to navigate, especially when it comes to understanding your mortgage.
Principals, fixed rates, terms, adjustable rates…what does it all mean?
If you’re planning to take on this challenge in 2017, you need to understand what you’re signing up for.
Read on to learn everything you need to know about mortgage rates in Florida.
Our Guide to Mortgage Rates in Florida
Securing a good mortgage rate can be a confusing process, especially if you’re a first-time homebuyer. Here are some basics to de-mystify the subject.
Parts of a Mortgage Agreement
Your mortgage is made up of three main parts: the principal, the term, and the rate.
The principal is the total amount you need to borrow. With a statewide median home price of $221,050 and rising, this principal amount can be quite high for Floridians.
The term is the length of time you have to pay off your principal balance. Most mortgage terms are either 15 years or 30 years. You should choose a term that works for you, just keep in mind the pros and cons of each one.
Your monthly payments will be lower with a 30-year mortgage, but you’ll end up paying much more in interest over time. If you opt for a 15-year loan, your mortgage rate will likely be lower. However, your monthly payments can be quite high.
Your mortgage rate is the final piece of the puzzle.
It determines how much interest you pay along with your monthly principal payments. Since the principal amount of your home loans can be pretty high, even slight differences in mortgage rates can add up quickly.
There Are Different Options When It Comes to Mortgage Rates in Florida
When you apply for a mortgage, you have the option of going for a fixed rate or an adjustable rate.
Each rate type has some drawbacks, so it’s important to consider your options carefully.
With a fixed rate, you can expect:
- The same payment amount each month
- A higher interest rate (at first)
Fixed-rate mortgages often start out as the more expensive option. For that extra price, you’re buying consistency. You’re getting the peace of mind that comes with knowing how much you can expect to pay every month. You’ll know this for the next 15 to 30 years.
An adjustable-rate mortgage, or ARM, means:
- A lower interest rate to start
- A fixed-rate period where your monthly rate doesn’t change
- Uncertainty after your fixed-rate period ends
If you’re dead-set on an ARM, take a look at your options for your fixed-rate period. Some mortgage lenders give you five years with the same rate. Others offer up to 10.
You should also keep an eye out for a lender who offers rate caps.
That way, if the market drives rates up exorbitantly high, you’re somewhat protected.
Why Mortgage Rates in Florida Change
Several different factors affect current mortgage rates in Florida and across the country.
The Federal Reserve is a big part of that fluctuation.
The Fed sets the rates banks can charge for short-term loans. Since this influences the way banks across the country do business, the effects trickle down to impact mortgage rates, too. Low rates from the Fed generally mean lower mortgage rates for you.
Inflation also affects mortgage rates in Florida. If the dollar loses a little value, mortgage rates rise to compensate. If the dollar is steady, rates tend to be low.
The state of the economy can also change mortgage rates. Conversely, mortgage rates can impact the economy, too. Generally, periods of strong economic growth will see lower rates.
Finally, global news can also play a part in rate levels here at home. Uncertainty, unrest, international competition, and resource shortages can all create bumps in America’s mortgage rates.
This is why even economic experts have trouble predicting what mortgage rates will do over time. It can be almost impossible to understand how so many moving parts will affect the housing market.
Mortgage Rate Trends in 2017
So far in 2017, rates have hovered between 3.87 and 4.27. Rates are currently trending upward, along with the average loan amount for borrowers.
That said, these rates are still relatively low. Now may be the time for you to buy, if you can qualify for a great mortgage rate.
How to Qualify for the Best Mortgage Rates in Florida
There are a couple of ways to qualify for a lower rate.
Choose Your Mortgage Carefully
Spend some time considering your options when it comes to your loan term and rate structure.
Remember, a longer term means lower payments. However, you’ll pay more over time. Fixed rates start high. Still, ARMs can jump higher with market fluctuations.
There is no one-size-fits-all mortgage plan, so pick something that works for you and your family.
Consider Your Credit Score
A higher credit score can mean a lower mortgage rate.
Don’t be afraid to pull your credit report if you’re unsure where you stand. If your score is looking a little too low, work to pay down some of your existing debt. You need to improve your standing before you apply for a mortgage.
Look for Special Programs to Help Lower Costs
You might qualify for one or several special loan programs. If you are an active military member or a veteran, a first-time buyer, or a rural resident, you might qualify for a federal loan program to help with some of your mortgage costs.
Finally, don’t be afraid to compare mortgage rates until you land on the best one for your budget.
Apply for a Mortgage in Florida Today
If you’ve surveyed your options and you’re ready to apply, New Florida Mortgage can help.
We offer four application options to choose from. You can apply online for fast approval. You can also pull your most recent credit report before you start. We also offer pre-approval and pre-qualification options to prospective borrowers.
Let us help you make your dream of homeownership a reality. Apply online for a mortgage or learn more today.