3 Things You Can Actually Control About Your Mortgage Rate Right Now

If you're trying to buy a home, affordability is probably what keeps you up at night. And as you watch mortgage rates tick up again lately, it’s fair to wonder if you should just hit pause and wait for them to go down. 

For now, though, they’re headed the other way. Mortgage News Daily data shows how rates have risen this year (see graph below):

And if you’re wondering why? There are actually a number of reasons. 

Mortgage rates are impacted by the situation overseas, economic data, inflation numbers, oil prices, and even decisions from the Federal Reserve (who recently decided to hike their Fed Funds Rate – which often affects mortgage rates too). As Danielle Hale, Chief Economist at Realtor.com, explains:

“The pressure on mortgage rates was here even before the Fed rate hike, and it doesn’t show signs of relenting. . .”

 

Now, that’s probably not what you wanted to hear. But, it doesn’t mean there’s nothing you can do. While you can’t control where mortgage rates go from here, you can focus on several factors that may influence the rate you’re offered.

So where should you focus? Let's walk through it.

How Your Credit Score Can Affect Your Mortgage Rate

Your credit score plays a big role in the rate you qualify for. Improving your credit score may help you qualify for more favorable loan terms, including a potentially lower interest rate. As Freddie Mac puts it:

"Generally, the higher your credit score the more options will be available to you, including better loan terms and a lower interest rate."

If you’re preparing to buy, it may be worth reviewing your credit before applying for a mortgage. If you're not sure where your score stands right now, or how to improve it, talk to a trusted loan officer.

Explore Your Mortgage Loan Options

The type and term of your loan both affect your rate. Conventional, FHA, VA, and USDA loans each come with their own requirements and rates, and your term (15, 20, or 30 years) changes both your payment and the total interest you'll pay. The structure matters, too. A fixed-rate loan holds the same rate over time, while an adjustable-rate loan usually starts lower and can move later on. Bankrate explains it this way:

". . . rates on fixed-rate loans are typically higher than introductory rates on adjustable-rate loans because the fixed-rate lender takes on the risk that rates could increase during the loan’s term. Likewise, government-backed FHA, VA and USDA loans sometimes have lower rates because they have a government guarantee or insurance that cuts the lender’s risk."

It’s important to explore your options with a lender to see what makes the most sense for you. Just be sure to balance your goals, your possible rate, and any potential tradeoffs before making any decision. You may even want to talk to multiple lenders to see how the options vary. 

Consider a Newly Built Home for Potential Mortgage Rate Incentives

Another potential path to a lower rate may be available when you consider a newly built home. Some builders are offering mortgage rate buydowns, which may lower the interest rate and monthly principal-and-interest payment for qualified buyers, depending on the terms of the incentive. It’s one way some builders are working to attract buyers and sell available homes.

According to Realtor.com, buyers of newly built homes landed a lower average rate last quarter than buyers of existing homes (see graph below):

If a lower rate is your goal, it may be worth asking your agent about new construction communities that are currently advertising this type of incentive locally, and reviewing the financing details with a qualified mortgage lender.

Bottom Line

You can’t control where mortgage rates go, but you can focus on factors that may influence the rate you’re offered, including your credit, loan options, and the type of home you buy. A qualified mortgage lender can help you understand the rates and loan programs available based on your individual circumstances.

If you’re thinking about buying or selling a home in North County San Diego, having current local information can help you plan your next move. Explore homes for sale in North County San Diego, check your home value, review the latest North County San Diego market snapshot, or use the mortgage calculator to estimate potential monthly payments.

When you’re ready to discuss your real estate goals, contact us to get started.

Frequently Asked Questions

What factors can affect the mortgage rate I’m offered?

Mortgage rates are influenced by broader market and economic conditions, but factors such as your credit score, loan type, loan term, and whether you choose a fixed- or adjustable-rate mortgage can also affect the rate you’re offered. A qualified mortgage lender can help you understand the options available based on your individual circumstances.

Can new construction homes offer lower mortgage rates?

Sometimes. Some homebuilders offer financing incentives, such as mortgage rate buydowns, on select newly built homes. Availability, terms, and eligibility can vary by builder, community, lender, and buyer qualifications.

If you’re considering new construction homes in North County San Diego, ask about current builder incentives and review the financing details with a qualified mortgage lender.

Should I wait for mortgage rates to go down before buying a home?

I get asked this every week.

Here's what I tell people. Nobody controls rates. Not you, not me, not the Fed watchers on TV guessing every meeting. What you can control is your credit, your loan structure, and who's advising you. That's where a good lender changes the outcome, not a crystal ball.

Here's the move a lot of my buyers are making right now: some sellers are covering the rate buydown. Homes are sitting longer, sellers know it, and buyers are using that leverage. You get a lower payment without waiting on a market that isn't moving your way anytime soon.

I spent almost 30 years as a loan officer in combination of being  your realtor. I've watched rate cycles come and go. My take: don't build your plan around a rate drop nobody can promise you. Build it around the numbers you can negotiate today.

About Patricia Villanueva – North County San Diego Real Estate Agent

Patricia Villanueva is a North County San Diego real estate agent helping buyers and sellers navigate the local housing market. Whether you’re looking to buy a home, sell a home, explore new construction, or understand your home’s estimated market value, Patricia Villanueva provides local real estate guidance based on your goals and current market conditions.

Serving home buyers and sellers throughout North County San Diego, including Bonsall, Oceanside, Vista, San Marcos, Escondido, Fallbrook, and nearby communities, Patricia Villanueva can help you search homes for sale, evaluate available properties and new construction communities, review comparable sales and local real estate market trends, and develop a strategy for selling your home.

If you’re looking for a real estate agent in North County San Diego to help with your next move, contact Patricia Villanueva to discuss your home buying or selling goals.

Disclaimer: This content is for general informational purposes only and is not intended as financial, mortgage, tax, or legal advice. Mortgage rates, loan programs, builder incentives, terms, and eligibility are subject to change and may vary based on individual circumstances. Consult a qualified mortgage lender or other appropriate professional for guidance specific to your situation. Real estate market conditions and property availability vary by location and may change over time.