Today's Rates In New Mexico
Looking to buy a home in New Mexico? Refinance your current mortgage there? Maybe take out a home equity loan or reverse mortgage? If so, you're going to want to familiarize yourself with New Mexico mortgage rates and learn how to find your best deal.
New Mexico mortgage rates primarily depend on two things:
- The kind of loan you are seeking
- The kind of borrower you are
Mortgage rates vary among various types of New Mexico home loans. Fifteen-year loans have lower rates than 30-year mortgages do. Adjustable rates start out lower than fixed rates do, though they will vary over time. Home equity loans – which are a type of mortgage – have higher rates than you'll pay on a home purchase or refinance loan. And so forth.
What type of borrower are you? Borrowers with strong credit who make substantial down payments get the best rates. Those with poor credit scores may find themselves paying significantly higher rates, when they can find a lender to approve them, and often must make larger down payments as well. Similarly, borrowers making small down payments usually find themselves paying higher rates or fees for their loan.
There's another factor in here: the lender you choose. While New Mexico mortgage companies strive to compete with each other, they price their loans in different ways. Some may charge higher fees but lower rates, while others may do just the opposite. Not all lenders target the same type of borrower, either – the lender who has the best deal for someone with strong credit buying a home in an upscale section of Santa Fe may not be the best choice for a first-time homebuyer seeking an FHA loan on the outskirts of Albuquerque. You want to find the best home loan and mortgage lender for you.
If you browse around our site, following the links at the top and bottom of this page, you'll find a wealth of information to help you become an informed mortgage consumer, plus links to useful tools like mortgage calculators to help you find the best mortgage for you.
Finding the best mortgage rate – and fees
Getting the best deal on a mortgage isn't just about finding the lender who's advertising the lowest rate or who gives you the lowest quote. You have to pay attention to the fees as well. Closing costs on a home loan can range from 2-6 percent of the loan amount, which is a pretty hefty chunk of cash – and can offset any benefit you might get from a lower rate.
For this reason, it's a good idea to use a mortgage calculator to figure out the total cost of different loan offers over the life of a loan. Or you may just decide that paying out a big chunk of cash up front wouldn't reduce your monthly payments enough to be worthwhile.
Rather than looking at mortgage rates when comparing loan offers, it's a good idea to compare the APR – annual percentage rate – instead. The APR reflects the full cost of the loan, both the rate and fees, and expresses it as an annual interest rate. The APR must be included with any loan offers or advertisement of lending rates, and is particularly useful for comparing different offers of fixed-rate loans.
About New Mexico home loans
Current New Mexico mortgage rates for some of the most popular types of loans are listed at the top of the page. That's a good place to start, but those may not be the rate you'll pay. For one thing, mortgage rates changes daily – sometimes even more often – so by the time you apply for a loan, rates may have moved up or down.
Current mortgage rates are also averages of what people are paying. What you pay may vary, depending on a variety of factors, including:
- Your credit score: The lowest rates go to borrowers with good-to-excellent credit. On most home loans, mortgage rates increase with lower scores, gradually at first and then in increasingly larger steps the lower one's score goes.
- Down payment: Again, borrowers with large down payments – or substantial home equity in the case of refinancing – get the best rates. Rates often increase as down payments decline.
- Fees: Again, as we noted above, fees can have a definite effect on your mortgage rate. A lender will sometimes charge a higher fee than a higher rate in some situations, such as with a lower credit score or smaller down payment, so pay attention.
- Discount points: Discount points are a special type of fee that allows you to buy a lower mortgage rate. Each point costs 1 percent of the loan amount and lowers your rate by a certain amount, usually one-eighth to one-quarter of a percentage point. Buying points can save you money over the long run, but a rate offer that includes 2-4 points may not be as good a deal as it appears.
- Loan amount: Jumbo loans, those that exceed the lending limits allowed on conforming mortgages, generally charge higher rates than you'd pay on a conforming loan backed by Fannie Mae or Freddie Mac. You may also pay a higher rate (or fees) on a smaller mortgage under $100,000 or so, because the loan is otherwise too small to be worthwhile for the lender to make.
Types of New Mexico home loans
Rates vary among different types of loans as well. Here are some of the main ones.
- Conforming loans: The most common type of home loan in the country, these are mortgages for a home purchase or refinance that meet the standards set by Fannie Mae or Freddie Mac. These offer their best rates for borrowers with high credit scores who can make a substantial down payment. Borrowers can qualify with scores as low as 620 or down payments as small as 3 percent, but should expect to pay higher rates and/or fees in return. Borrowers who put down less than 20 percent must pay for mortgage insurance, usually as a monthly charge, though that can eventually be cancelled when one accumulates sufficient home equity.
- FHA loans: New Mexico first-time homebuyers often look to FHA loans, which offer more lenient credit standards than conforming loans do. Borrowers with lower credit scores or smaller down payments can often get better rates than they can on an conforming loan, with down payments as low as 3.5 percent allowed. However, FHA loans come with higher upfront fees than conforming loans do and borrowers who put down less than 10 percent must pay additional monthly charges for mortgage insurance for the life of the loan.
- VA loans: These give eligible New Mexico veterans and active duty personnel the option of no-down payment mortgages at competitive rates and no additional monthly charges for mortgage insurance. However, borrowers who choose do make no down payment are charged higher fees than those who put up a down payment of 5-10 percent.
- Home equity loans: These are a type of second mortgage that allow you to borrow against the value of your home. Home equity rates run higher than rates on primary mortgages for a home purchase or refinance, but are lower than on other, unsecured types of loans. A special type of home equity loan, called a home equity line of credit or HELOC, works like a credit card secured by your home and allows you to borrow variable amounts on the schedule you wish.
- Reverse mortgages: These are a special type of home equity loan for homeowners age 62 and above. New Mexico reverse mortgages allow you to borrow against your home equity with no obligation to make any payments as long as you continue to live in your home. Borrowers may opt to receive a lump sum of cash or a series of regular payments. However, rates and fees are higher than on regular home equity loans.