How is my mortgage rate determined?

The mortgage rate you are charged when purchasing a home in Pennsylvania is determined by a variety of different factors. Your credit score, the type of loan you have, and the current market rates are all taken into consideration when determining your rate. Your credit score is one of the most important factors in determining the rate you will be charged. Lenders view your credit score as a reflection of how likely you are to repay your loan on time and in full. A high credit score is an indication of responsible credit usage and reliability when it comes to making timely payments. People with higher credit scores tend to get more favorable rates than those with lower scores. The type of loan you choose is another factor. If you purchase a fixed-rate mortgage, you will lock in a single rate throughout the life of the loan. With an adjustable-rate mortgage, your rate will change over time to reflect market conditions. An adjustable-rate mortgage can be more beneficial in the short-term, but also carries a lot of risk. Finally, the current market rate will impact the rate you receive. Mortgage rates tend to fluctuate over time, and lenders will adjust their rates according to the current market. When market rates are low, lenders will pass along the savings to you in the form of a lower rate. In summary, the mortgage rate you receive when purchasing a home in Pennsylvania is determined by a variety of factors – the most important of which being your credit score, the type of loan you choose, and the current market rate.

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