What Determines Interest Rates
When you’re shopping for a mortgage, you want to get the best possible interest rate – but how do you do that?

What Determines Interest Rates?

Your credit score and the market typically determine what interest rates you’re eligible for when you apply for a mortgage loan. However, there are a few things you can do to change your rate.
Here’s why interest matters so much. A $100,0000 loan with a 5 percent interest rate will cost you $93,256 in interest payments – but if you had a 4.5 percent interest rate, you’d pay $82,407 in interest over the life of your loan. That’s a savings of $10,849.

How to Lower How Much You Pay in Interest

  • Improve your credit score. The higher your credit score is, the lower your interest rate will be.
  • Pay points. Discount points are equal to 1 percent of the loan amount, and in many cases you can use them to buy down your interest rate.
  • Put down more money. The higher your down payment is, the less you have to borrow – and your down payment is tied to the interest rate you’ll get.
  • Shorten the term of your loan. Your loan is shorter, so you’ll end up paying less money in interest.

Are You Buying a Home for Sale in Aspen?

Call us at 970-429-8275 or get in touch with us online to tell us what you want from your next home. We’ll begin searching Aspen real estate listings right away. If you’re selling, get your free Aspen real estate market update and find out how we can help you sell your home quickly and at the best price.
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