Mortgage Rates Explained
Understanding mortgage rates is the first step to making smart borrowing decisions. At Renew Lending, we believe in transparency and education. Here's everything you need to know.
What is a Mortgage Rate?
Your mortgage rate is the percentage you pay annually on your home loan. It directly affects your monthly payment and total cost of borrowing. Understanding how rates work helps you make informed decisions about your financing options.
Fixed vs. Adjustable Rates
Fixed-rate mortgages keep the same rate for the loan's entire term, providing predictable payments. Adjustable-rate mortgages (ARMs) start lower but can change after an initial period. At Renew Lending, we help you understand which option fits your financial goals.
Market Conditions
Mortgage rates change daily based on bond markets and economic conditions. Mortgage-backed securities (MBS) are the primary driver—as these securities move, lenders adjust rates accordingly. The Federal Reserve also influences rates through monetary policy and bond purchases.
Factors That Affect Your Rate
Credit Score
Your credit score is one of the most impactful factors. A higher score typically means a lower rate. Even if your score isn't perfect, we have programs to help.
Loan-to-Value (LTV)
This compares your loan amount to the home's value. A larger down payment improves your LTV and can lower your rate significantly.
Debt-to-Income (DTI)
Lenders compare your monthly debt payments to income. Lower DTI makes you a more attractive borrower and can lead to better rates.
Loan Type & Term
Different loan programs (FHA, VA, Conventional, etc.) and terms (15-year, 30-year) have different rates. We'll help you find the right fit for your situation.
The Renew Lending Approach
While we can't display rates online (because your personal financial situation affects what you qualify for), we can help you understand what influences your rate and how to improve it.
Every borrower is unique. Our loan officers work directly with you to evaluate your credit, income, debts, and savings to find the best loan program and rate for your situation. We'll explain your options clearly and help you make decisions that align with your financial goals.
Whether you have excellent credit or are working to rebuild it, we have programs designed to help you achieve homeownership at a competitive rate.
Common Questions
Why do mortgage rates change daily?
Mortgage rates move with mortgage-backed securities (MBS) trading on the bond market. When bond prices drop, rates rise, and vice versa. Economic data, Fed announcements, and investor sentiment all influence these movements.
Can I lock in a rate?
Yes. Once you're pre-qualified, we can lock your rate for a specific period (typically 30-45 days). This protects you if rates rise during your home purchase process.
How much does my credit score impact my rate?
It's significant. Typically, a 20-point difference in credit score can change your rate by 0.25%. Even small improvements to your credit can save thousands over the life of your loan.
Can I get a better rate with a larger down payment?
Absolutely. A larger down payment improves your loan-to-value ratio, reducing the lender's risk and lowering your rate. It also helps you avoid private mortgage insurance (PMI).
What's the difference between APR and interest rate?
Your interest rate is what you pay to borrow the money. APR (Annual Percentage Rate) includes the interest rate plus other costs like origination fees and insurance. APR gives a more complete picture of borrowing costs.
Get In Touch
Ready to Get Started?
Contact us today and let's begin your home buying journey together.
Call Us
1-888-958-8877
Email Us
info@renewlending.com
Home Office
1155 West 4th Street, Ste 220
Reno, NV 89503