A Good vs. Great Mortgage Rate

[badcramps]

We are (hopefully) first time home-buyers and going through the preapproval process now and about to travel out to where we are moving (for a new job for me) to look for a house.

Just curious what a "good" interest rate is vs. a "great" one for a 30 year fixed mortgage is in your view.

I can find information on average rates pretty easily online, but is an average rate a "good" rate? I'm thinking of school where average = a C, not what I'd call "good" at all! But then as far as I understand, things have gotten much tougher lately in terms of getting approved for a mortgage at all, so does that mean the D and F students are essentially no longer even in the game/getting mortgages? Does it being tougher to get a mortgage in the first place, then, affect the average rate?

 

[sukhakuli]

You can't just go by rates, you need to look at the entire package, so how much are all the fees? Also, higher loan amounts will have higher interest rates.

Just shop around. See who offers you the best deal. We ended up going with our credit union because they had what we needed, but they also tend to be very conservative.

 

[sonnyjane]

You can't just go by rates, you need to look at the entire package, so how much are all the fees? Also, higher loan amounts will have higher interest rates.

Just shop around. See who offers you the best deal. We ended up going with our credit union because they had what we needed, but they also tend to be very conservative.

As mentioned, it depends on a few other things.

DH and I got our mortgage in November 2013 and have a rate of 4.25% on a 30-year fixed. Looking online that looks better than the average. We got it through a local bank in town but they ended up switching it to SunTrust (larger) shortly after we took out the mortgage. We put 10% down - I know that can also make a difference. We also had credit scores in the 800's so that helped too. I'd say as long as you get close to the average, I'd be satisfied.

 

[wdwmom0f3]

We refinanced a few years ago at 3.875 I believe, and put it on 15 years. I would strongly suggest doing a 15 year over a 30 year if you can swing it. I wish we had done that with every home we ever bought.

 

[hlg22]

As others have said, a great rate is totally relative to the other costs and fees, what your credit scores are, etc. When I refinanced in January of last year, I was able to get 3.6% for 30 years, and paid zero in costs/fees/points for the refi. I think that's a pretty great rate, and it was definitely (1) significantly better than my original mortgage rate, and (2) the best deal that I could get when shopping around for a refi, so I was happy. Incidentally, I called my credit union and they were able to offer the exact same rate...but with $18,000 in closing costs (!). No thank you.

I would ask friends and family (and maybe your realtor) for recommendations for a few excellent mortgage brokers who can run numbers for you, and see how what they can do compares to what you're seeing online. As a first time home buyer especially, I think it's so helpful to have a good, experienced mortgage broker who can explain things and walk you through the process.