Rising Rates Don’t Necessarily Mean High Rates – Let Us Explain.

You may have noticed that mortgage interest rates have risen recently. While your first instinct may be to give up on your dream of homeownership, there’s no reason to be on high alert.


In 2020 and 2021, mortgage interest rates fell to record lows in response to the Covid pandemic with the Federal Reserve helping to push mortgage rates below 3%. However, with a recovering economy, there has been a recent rise in 2022. Despite recent rises, current 30-year mortgage rates remain historically below average. According to Freddie Mac, the data reveals that between April 1971 and April 2022, 30-year mortgage rates averaged 7.78 percent. This means that even as rates hover near 5%, they are still relatively affordable compared to historical mortgage rates.


With so much talk about the national interest rate, it’s easy to forget that the borrower has a lot of power in determining their individual rate. Some of the most important factors that determine your mortgage rate include your credit score, debt-to-income ratio, and the amount of money you use for your down payment. The better your financial situation, the lower the risk you pose to your lender. If you don’t feel like you’re in a good financial position, there are some things you can do to help ensure you get the best rate possible for you. This includes paying down debt, making on-time payments, and saving. At the end of the day, a high credit score, low debt, and stable finances equate to a better interest rate.


There are numerous down payment assistance programs that can help ease the financial burden of homeownership. Another option that people may want to consider is getting an Adjustable-Rate Mortgage (ARM). An adjustable-rate mortgage is a home loan where the interest rate adjusts over time based on the market. This type of loan usually starts with a lower rate compared to fixed-rate mortgages but tends to fluctuate. There are two periods of an ARM, the fixed rate period, where the interest rate does not change. The length of this period varies depending on the specific terms of your loan. After that is the adjustment period where the rate can go up or down based on the market. These types of mortgages are becoming more popular with buyers because it’s a great way to keep mortgage payments as low as possible during the early years of the loan.

Let us help you through the entire loan process, from application to closing, managing all aspects in-house. This way, loans close faster, and you know what is going on every step of the way. Want to learn more? Visit silvertonmortgage.com.