When it’s time to buy a home, you may find an overwhelming amount of information about how to do it and what type of financing you should consider. Let’s take a look at the most popular home financing options so you can learn the difference before you reach out to a lender.
The average daily mortgage interest rate for Tuesday, February 6, 2024 is 6.99% for a 30 year fixed rate. The rate fell 0.05% from yesterday and rose 0.24% from January 2024. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
Lenders in the freerateupdate.com network are currently offering rates as low as 5.9% (6.1% APR) on a 30-year fixed-rate mortgage. Receive a rate up to 1.09% lower than today’s average 30-year mortgage rate if you qualify. ⓘ
The average daily mortgage interest rate for Tuesday, February 6, 2024 is 6.34% for a 15 year fixed rate. The rate fell 0.04% from yesterday and rose 0.33% from January 2024. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
Lenders in the freerateupdate.com network are currently offering rates as low as 4.9% (5.2% APR) on a 15-year fixed-rate mortgage. Receive a rate up to 1.44% lower than today’s average 15-year mortgage rate if you qualify. ⓘ
What types of homeowner mortgages are available?
A fixed rate mortgage, or FRM, is the most common type of mortgage for homeowners. This means you lock in your interest rate – which won’t change during the term of your loan. Even if your loan lasts 30 years, your monthly payments will not change. This is ideal if you want a standard monthly payment, especially if your income and home value will increase over time. This type of mortgage can help you make the most of your home as an asset.
An adjustable rate mortgage, or ARM, has an interest rate that is variable. Typically, the interest rate will remain the same for a set amount of time. They start with low interest rates, generally, but the rates can increase, according to the terms, over time.
FHA loans are backed by the government. Depending on your credit score, you may be able to qualify for this type of loan with 3.5 or 10% down (the higher percentage being for a lower credit score). While a bank issues the loan, the government backs it.
VA loans are strictly for those who served in the US military and their immediate family members. Similar to FHA loans, the government backs these – and they come with no interest to help veterans and active duty service members and their families get into homes. For interested veterans, be sure to check out this article on qualifying for a VA Loan.
There are a few other federal loan mortgage programs out there for those in specific situations, such as low-income borrowers and those who own farms and live in rural locations. Most people, however, will go for the standard FRM when it comes time to finance.