Mortgage and Refinance Rates in Nebraska

Today's Rates In Nebraska

If you're looking to buy a home or refinance your current mortgage in Nebraska, you'll need to know a few things about Nebraska mortgage rates. You may find the rates mortgage rates in Lincoln are not necessarily the same as those in Omaha or what borrowers are charged in small communities out on the plains. You'll also find that rates vary from lender to lender and from borrower to borrower as well. So the key is to find the lender who has the best mortgage rate for you.

Many borrowers don't even bother to compare mortgage rates. According to a study by the Consumer Financial Protection Agency, nearly half of all mortgage borrowers only seriously consider one lender before submitting their loan application. That's a big mistake. A fraction of a percentage point difference in a mortgage rate can add up to tens of thousands of dollars in additional interest paid over the course of a 30-year loan.

Ideally, you want to compare current mortgage rates from at least three Nebraska mortgage lenders and preferably more. That doesn't mean just checking their advertised rates, you want to get personalized quotes for the rate they'll offer someone with your credit score, down payment and loan type. That way you'll know the rate you get and not just the generic rate being advertised.

Shopping for Nebraska mortgage loans online

Fortunately, shopping for Nebraska mortgage rates has become a lot easier in recent years, with the growth in online lending. This not only makes it easier to research lenders and request rate quotes, it gives you a lot more lenders to choose from as well. You don't need a lender who's got an office nearby, you can request quotes from any mortgage lenders in Nebraska!

In fact, you can do business with mortgage lenders who don't even have an office in the state, as long as they are licensed to originate loans in Nebraska. You can do almost the entire process online – shop for loans, request rate quotes, talk with a loan officer, submit your application and supporting documentation, respond to any requests for additional materials, etc. all from your home. The only thing that needs to be done in person is the closing, which can be done at the office of a title company or attorney authorized by your lender.

Comparing Nebraska mortgage rates

When shopping for a home loan, you don't want to just choose the lender that's listing the lowest mortgage rates. For one thing, those rates are usually available only to borrowers with the best credit who are making a good-sized down payment or are refinancing with substantial home equity. The rate you get may be higher.

Second, the mortgage rate is only part of the story. You want to check the fees as well. Closing costs can be anywhere from 2-6 percent of the loan amount, which is a pretty hefty bite. So a low rate with high fees may not be quite the deal it appears to be.

Pay particular attention to whether the rate includes any discount points. These are a special kind of fee that allows you to reduce your rate by paying a bit of interest in advance. Each point costs 1 percent of the loan amount and reduces your rate by a fraction of a percentage point. So a rate that includes two or three points may not be as good a deal as a somewhat higher rate with no points or just a fraction of a point.

Instead of comparing rates, it's often better to compare APRs instead. The APR, or annual percentage rate, reflects the total cost of the loan, both the mortgage rate and fees, in a single figure reflecting the annual cost of the loan. The higher the APR, the more costly the loan. Both the APR and discount points must be included with any offer of a mortgage rate, including rate quotes and advertisements.

Nebraska FHA loans

Lenient credit and small down payment requirements are two big reasons why FHA loans are a common choice for first-time homebuyers. Nebraska borrowers with credit scores as low as 580 can be approved for an FHA loan with a down payment of 3.5 percent, though some lenders will allow even lower scores with a down payment of 10 percent or more.

Compared to a standard "conforming mortgage" that most lenders offer, FHA loans are not only easier to qualify for, they often have better rates for borrowers with weaker credit and limited finances who cannot make a large down payment.

For homebuyers looking at a property in need of some work, there is the option of a "fixer-upper" loan in the form of an FHA 203(k) loan, which allows you to borrow funds for home improvements and repairs as part of the mortgage used to purchase the property.

Conforming mortgages

Sometimes called "conventional mortgages," these are home loans that conform to the guidelines set by Fannie Mae and Freddie Mac. The most common type of home purchase and refinance loans in the country, conforming mortgages offer their best rates and terms to borrowers with good to excellent credit who make a good-sized down payment or have substantial home equity when refinancing.

Credit scores as low as 620 are allowed on conforming loans, but expect to pay gradually higher rates for lower scores. Borrowers with good credit can make down payments as small as 3 percent. If you have a lower credit score or want to make a small down payment, it's a good idea to request loan offers for both FHA loans and conforming mortgages to see which is the best deal for you.

About mortgage insurance

FHA loans and conforming mortgages have different requirements for mortgage insurance, which is one of the significant differences between the two. FHA loans charge an upfront mortgage insurance premium of 1.75 percent of the loan amount, which conforming loans do not have. This can often be borrowed as part of the loan itself, but is one of the reasons conforming loans are usually preferred by borrowers with good credit.

Both FHA loans and conforming mortgages require another type of mortgage insurance on any loans where the borrower makes a down payment of less than 20 percent, usually in the form on ongoing monthly premiums. These premiums can be canceled on conforming mortgages when you exceed 20 percent equity, but borrowers who put less than 10 percent down on an FHA mortgage must pay such premiums for the duration of the loan (though they can eventually refinance when they exceed 20 percent equity).