Current Mortgage Rate

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The Current mortgage rate can affect your monthly payment

The current mortgage rate has a lot to do with the type of home loan mortgage you apply for. If mortgage rates are high, many people try to wait until they go down before they apply for a mortgage. Others take the mortgage at the higher rate and choose an adjustable rate mortgage before they lock in. This allows them the flexibility of waiting until the rates decrease in order to save money on the amount of interest they pay.

Current mortgage rates are tied to market conditions as well as real estate conditions. In times of slow economic growth the interest rates may be lower and start to rise when the economy starts to improve. Banks and other lending institutions also have different rates available for different home loan mortgage programs. The rate of interest you are charged for your mortgage depends on several factors: your credit history, the home you are buying and the area it is in.

The current mortgage rates are about 6%. This is the lowest they have been in some time. If you are taking out a home loan mortgage, there are several things you can do to actually lower this rate:

• If you have an adjustable rate mortgage, you can pay more each month than the regular payment requires. The interest that is charged each month is the product of the current mortgage rate times the outstanding balance. By paying down the balance, the interest will of course be less each month.
• Start with a 2-1 buydown. With this type of interest rate, you start off paying interest at about 2% below the current mortgage rate. The rate increases by 1% in the second year and a final 1% in the remaining years. You may actually end up paying about .5% above the current mortgage rate, but by watching the market trends you can refinance when it seems to be to your advantage to do so.
• You can get a floatdown rate. By paying an extra fee, you can get a home loan mortgage where the interest charged will reflect the current mortgage rates. For example, if you obtain a mortgage when the rates are up and they drop during the term of your loan, then by having a floatdown, you will get the lower current mortgage rate.

Check with your loans officer or even do an online check of home mortgage loan companies to see which one will be able to offer you the best deal with regard to the current mortgage rates.