Today's Rates In North Dakota
A home mortgage is often the biggest financial transaction that many of us will have in our lives. So it's important to shop around to find the North Dakota lender who will offer you the best mortgage rate and terms when buying a home or refinancing your current loan. A fraction of a percent in your mortgage rate can mean a difference of tens of thousands of dollars over a typical 30-year loan.
Unfortunately, many borrowers don't do much shopping around when looking for a home loan. According to a Consumer Financial Protections Bureau study, nearly half of borrowers gave serious consideration to only one lender when getting a mortgage. So why is that? Are they intimated by the process? Do they just assume their regular bank will give them the best deal?
Comparison shopping for North Dakota home loans doesn't have to be difficult. And you don't know which lender will give you the best deal until you start looking. So where to start? Here's a few pointers.
About online lending
Shopping for North Dakota home loans and finding the best mortgage rates has gotten a lot easier with the arrival of online mortgage lending in recent years. No longer do you actually have to visit a bank branch or the office of a mortgage lender to get information about home loans or submit an application. Nearly the entire process can be done online.
Online lending not only makes it easier to apply for a home loan, it also greatly increases your options. You're not just limited to North Dakota mortgage lenders or brokers with an office near you, you can do business with any mortgage lender in the state! In fact, you can get an online loan from a lender who doesn't even have an office in North Dakota, as long as they are licensed to do business in the state.
Having more lenders to choose from means more competition for them and a better chance for you to get a lower rate. So how do you find the best rate?
Comparing North Dakota mortgage rates
As you probably know, mortgage rates move up and down from day to day and week to week, based on market conditions. Current mortgage rates in North Dakota are listed at the top of the page. But those are average rates paid by borrowers and may not be the rates you'd get even if you locked in your rate today.
Mortgage rates are highly personalized – they vary from borrower to borrower, even for the same type of loan. Your credit score, down payment, debt-to-income ratio, loan amount, where your home is located and more can all have an effect on the rate you're offered. And different lenders will likely offer you different rates for the exact same loan.
The important thing is to find the North Dakota mortgage broker or lender who has the best rate for you. To do that, you need to get personalized rate quotes from the lenders themselves. Find several who seem to be offering good deals, then contact them to request personalized rate quotes based on your profile as a borrower and the type of loan you're seeking. You can also use a rate quote form such as the one at the top of this page to request personalized quotes from multiple lenders at once.
Don't forget the fees
When comparing loan offers or advertisements from North Dakota mortgage lenders, don't focus just on the mortgage rate. That can be misleading. Closing costs and other fees can be a major expense as well, running as much as 6 percent of the loan amount. And fees vary from lender to lender. So a loan with a low rate but high fees may not be as good a deal as it appears.
Rather than comparing mortgage rates, check the APR on different loan offers instead. The APR, or annual percentage rate, shows the annual cost of a loan, both rate and fees, as a single percentage. It's particularly helpful with fixed-rate loans.
You can also use a mortgage calculator to determine what the total cost of different loans will be over time, both the fees and accumulated interest. That lets you make the most accurate comparison to see which is the best deal.
Types of North Dakota home loans
As a borrower, you've got several options when it comes to types of home loans. Some are better suited to certain types of borrowers than others are; in some cases, you may need to look carefully to see what type will best serve your needs. The main ones are:
These are home loans that conform to certain guidelines for things like borrower credit score, down payment, debt-to-income ratio, property type, loan amount and other factors. Loans that meet these criteria are considered less risky than ones that do not, so they can offer better rates and terms. These are the most common type of home purchase and refinance mortgage in the United States.
Conforming mortgages are available to borrowers with credit scores as low as 620 or down payments as small as 3 percent, though the lowest rates go to borrowers with higher scores and larger down payments. Borrowers who make less than a 20 percent down payment must pay additional charges to carry mortgage insurance on the loan, although this can eventually be canceled when you have sufficient home equity.
North Dakota FHA loans
Easier to qualify for than conforming mortgages, FHA loans are a popular North Dakota first-time homebuyer loan. They're also suitable for many other borrowers with weaker credit and limited finances. Borrowers with lower credit scores may also be able to get better rates on an FHA loan than they would otherwise, while qualifying for down payments as low as 3.5 percent. Borrowers who put down less than 10 percent on an FHA loan do have to carry mortgage insurance for the duration of the mortgage, however.
As a general rule, you can use the same types of loans for a mortgage refinance in North Dakota as you would to purchase a home. The big difference is that your home equity replaces the down payment requirement on a home purchase, though lenders may want to see more home equity on a refinance than they would in an equivalent down payment when purchasing.
There are programs that allow you to refinance with little or no home equity, often called streamlined refinancing, that are available to borrowers that have stayed current on their mortgage payments. These eliminate the need for a home appraisal when refinancing, so one's home equity is not a factor.
Home equity loans
These are a special type of mortgage that allow you to borrow against the equity you've accumulated in your home to raise funds for any purpose you wish. Because they are secured loans, they generally offer better rates than you can get on credit cards or other unsecured loans.
Home equity loans come in two main types: a traditional home equity loan, where you borrow a sum of money and repay it; and a home equity line of credit, or HELOC, which gives you a credit line you can borrow against as you wish. Traditional home equity loans usually have fixed rates, while HELOCs are adjustable-rate loans.