With all the talk about mortgage interest rates, their rise and fall and the Fed rate cuts, you may be wondering just how your mortgage interest rate is determined. Believe it or not, the Fed rate cuts do not have as much to do with the interest rate you receive as one might think. The following are the main driving factors on what interest rate you receive.
The 10 Year Treasury Rates are actually more important to the rise and fall of interest rates than the Fed rates and all the Fed rate cuts. The local areas can have a huge impact on your rate as well. If you currently are buying or trying to refinance in a declining market, your rate will be noticeably higher.
However, the main factor on what interest rate you receive on your mortgage relies most heavily on your credit score and credit worthiness. Be sure and keep your credit up to date by checking it every six months or so for erroneous information, and pay your bills on time. This way when you’re ready to buy a home, your credit can work for you instead of against you.
Kim Shuford
