Today's Rates In Wisconsin
As a potential mortgage borrower, you may have a lot of questions while hunting for the best mortgage rates in Wisconsin or trying to figure out what's the best home loan for you. You may need to learn some new words and concepts as you sort through your options and weigh your choices, but it's a manageable task.
What is APR? A HELOC or traditional home equity loan? What do 5/1, 7/1 or ARM mean? Can't I just go to my regular bank and get the same 30-year loan as everyone else? These are some of the questions you may have as you look through your options for Wisconsin home loans.
We'll touch on some of the major points shortly. But if you want in-depth information, check the links at the top and bottom of this page for links to detailed explanations of a wide range of mortgage and real estate topics, including in-depth discussions of refinancing, how loans are priced, home equity loans, credit scoring and more.
Meanwhile, here's a short primer on Wisconsin home loans and how to find the best mortgage interest rates in Wisconsin.
Wisconsin Mortgage Interest Rates
Knowing some basic rules about mortgage interest rates can help you to find that low rate mortgage quickly. The rate that you'll be offered by a lender depends on three main factors: how risky you are as a borrower, what's happening with the overall economy, and what type of loan is being offered.
The best mortgage rates in Wisconsin go to borrowers with good credit and who can make a substantial down payment (or have substantial home equity when refinancing). When you are perceived as more risky, your rate will be higher. When the banks have to pay more for their funds because the economy is tight, your rate will also be higher.
Wisconsin mortgage rates associated with particular loan types are a little more difficult to predict, but two rules usually hold true. First, shorter loan terms have lower interest rates than longer ones. Second, adjustable-rate loans will have lower initial rates than fixed-rate loans, but those rates could rise over time, so there's more risk. (Though they can also decline if current mortgage rates in the mortgage industry fall during that time).
Don’t Overlook the Fees
One of the biggest problems people have in shopping for home loans is that they often focus solely on the interest rate. That's a big part of the picture, but it's not the only thing you need to look at.
Closing costs, the fees you pay to obtain a mortgage, are another big factor. This can range from 2-6 percent of the loan amount, so they have a big effect on the total cost of the loan. A low rate can sometimes hide the fact that a loan has unusually high fees and may not be that great a deal. This is where a mortgage calculator comes in handy, to see how different combinations of interest rates and fees affect the total cost of a loan.
An important type of fee are discount points. This is a special fee you pay to buy a lower mortgage rate. Buying points can significantly lower your rate and save you a lot of money over time. But they can also be used to hide the true cost of a loan – look carefully at loans offers with unusually low rates that include two or more points as part of the cost.
Conforming Mortgages vs. FHA Loans
For most borrowers seeking to buy a home or refinance a mortgage, the choice comes down to either a conforming mortgage (so called because they conform to the guidelines set by Fannie Mae and Freddie Mac) or an FHA loan. Wisconsin borrowers with strong credit typically opt for a conforming mortgage, while those with weaker scores often get better rates with an FHA loan.
Both types of mortgages allow very small down payments – as little as 3 percent for a conforming mortgage and 3.5 percent for an FHA loan. However, you need good credit to be allowed to put only 3 percent down on a conforming loan, while the 3.5 percent down payment on an FHA loan is available to Wisconsin borrowers with credit scores as low as 580.
The easy credit requirements and low down payments make FHA loans a popular option for Wisconsin first-time homebuyers, as well as for others with limited credit or finances.
You can borrow more with a conforming mortgage than with an FHA loan, though the latter will still allow you to borrow enough to buy most homes in Wisconsin. The exact lending limits change year-by-year, and in some states higher limits are allowed in counties with high real estate values. For 2019 in Wisconsin, the maximum is $314,827 for FHA loans on a single-family home and $484,350 on conforming mortgages. Higher limits are allowed on 2-4 unit residences.
For qualified military veterans and active-duty personnel in Wisconsin, VA loans are often a good choice, offering the option of no down payments up to substantial lending limits. VA loans also do not require monthly payments for mortgage insurance on loans with less than 20 percent down, as conforming mortgages and FHA loans do.
Jumbo loans are mortgages that exceed the lending limits allowed on conforming mortgages. As a result, you can expect to pay a higher mortgage rate and face more stringent credit and down payment requirements as well.
The limit for what you can borrow with a conforming mortgage changes from year to year and can even vary from county to county in some states, depending on local real estate values. So the definition of what constitutes a jumbo mortgage varies as well. As of 2019, in Wisconsin jumbo loans are those exceeding $485,350 on a single family home (see conforming mortgages and FHA loans section above).
Bad Credit Mortgages
If you have spotty credit, obtaining a mortgage or mortgage refinance in Wisconsin can be particularly challenging. Unfortunately, some subprime lenders, also known as bad credit lenders, have a reputation for putting borrowers into very aggressive loan programs. You can protect yourself by interviewing several lenders and by analyzing your loan options in detail. For example, if you're offered an ARM, use a mortgage calculator to determine how high and how fast your interest rate might go up.
Comparing Loan Offers
When its all said and done, they key to finding the best Wisconsin mortgage rates comes down to two things. 1) Shop around and 2) compare.
If you have a mortgage calculator handy, comparing mortgages can be a relatively straightforward process. Mortgageloan.com's calculators are designed for a variety of tasks, including comparing fixed-rate mortgages (FRMs) to ARMs, and determining how much home you can afford.
The real work is collecting enough offers to compare. You can pre-qualify with lenders to get a rate estimate, but you really should fill out several no-obligation loan applications to receive full-fledged mortgage quotes with temporary rate locks. You can contact Wisconsin mortgage lenders directly to request rate quotes to work with, or use the form at the top of this page to obtain personalized rate quotes from several lenders at once.