Home prices in the Ocean State have grown steadily since reaching a median low of $201,000 in March 2012, according to real estate database Zillow.
With the median price rising to $280,000 in November 2018, finding the best mortgage rates in Rhode Island is increasingly important. While still below the $309,000 national median price for October reported by the U.S. Census Bureau, home prices in Rhode Island are quickly closing that gap.
Zillow predicted steadily increasing home prices in Rhode Island, reaching a median of $296,000 by October 2019. That jump will likely be caused by a variety of factors, from national economic considerations such as the potential for increasing interest rates to local and state-level concerns, such as the number of lenders operating in the state and regulatory specifics.
Rhode Island’s exceptionally high population density, a large amount of desirable property near and on the ocean, a mix of urban and rural areas, and many other factors can impact real estate prices.
To find the best mortgage rates in Rhode Island, you’ll need to keep these economic factors in mind while also making contact with a variety of lenders and determining the best approach for your financial position. Read on to learn more about how to find the best possible mortgage rates, terms, and conditions in Rhode Island.
Current Mortgage & Refinancing Rates in Rhode Island
4 Critical Elements That Affect Mortgage Rates & Refinance Rates in Rhode Island
Finding the best mortgage rates in Rhode Island requires some time and research, but the work you put into this process can easily pay off over the life of your home loan.
When you have the information you need to find the lowest interest rates and select other options that benefit your unique financial position, you can end up reducing the total financial commitment of your mortgage by many thousands of dollars.
You may also find other advantages to enjoy, from a lower down payment or shorter term to having a federal government agency secure the loan.
Credit scores help lenders determine some important specifics for individual loans, including the exact interest rate. Loan providers use credit scores because they represent a generally accurate snapshot of a prospective homeowner’s past behavior as a consumer as well as level of potential risk.
In general, higher scores indicate lower levels of risk and lead to more beneficial rates, while lower scores lead to the opposite. Although each lender is different and certain loans guaranteed by the federal government have relaxed standards, an especially low score can make it very difficult to secure a loan.
The Consumer Financial Protection Bureau has a detailed guide that can help you understand more about how a credit score is calculated.
Length of the loan
The term of a mortgage has a major impact on the interest rate homeowners pay and the cost of the home loan. Comparing the two most common terms, 15-year and 30-year, can help illuminate this difference.
All other conditions being equal, a 15-year mortgage will offer a lower rate because it takes the lender less time to recoup its investment. This means less interest is charged per month and over the course of the loan. The monthly payment is higher than the 30-year option, however, because the term is only half as long.
A 30-year mortgage, on the other hand, offers a lower monthly payment but a higher cost. If you can afford the higher payments, a shorter term allows you to save money. If you don’t have that kind of financial flexibility, a longer term helps you get a loan for the home you want in a more budget-friendly way.
Length of Refinance
A refinanced mortgage involves a new loan that pays off the existing one and provides the homeowner with new, generally more favorable rates, terms, and conditions. Just as the length of the initial home loan has a significant impact on interest rates and the total amount owed, so does the length of a refinance term.
A shorter refinance term means higher monthly payments compared to a longer refinance, but provides a long-term benefit in the form of a reduced interest rate and financial obligation.
A longer refinance term features lower monthly payments, but costs more over the life of the loan. If your financial situation has changed, and you want to adjust your monthly payments or reduce your interest rate, changing the length of your refinance can make a notable difference.
Type of refinance
Refinanced home loans can vary considerably from the original loan provided for the property in question. Homeowners need to keep all of their options in mind as there are a variety of approaches to consider, each with their own unique applications and advantages.
Cash in refinances require an influx of money from the homeowner, but pay off with lower payments and an improved loan-to-value ratio. Cash out refinances allow the homeowner to convert existing equity into cash while increasing the loan cost.
Other types of refinancing include switching between fixed and adjustable-rate mortgages, avoiding negative equity and a host of other reasons.
How to Get the Best Mortgage & Refinancing Rates in Rhode Island
Seeking out preliminary information, quotes, and pre-approval from a variety of lenders helps you find the best mortgage rates available to you in Rhode Island. When you can compare the specifics of mortgage offers, you can choose the loan that provides the best combination of interest rate, term length, and other conditions.
Because home loans represent a significant financial commitment over many years and a substantial part of a monthly budget, finding a cost-effective home loan is crucial. That’s especially important considering close to half of all Americans don’t engage in comparative shopping when looking for a mortgage, according to the CFPB, instead only working with a single lender.
As you start your mortgage search, make sure to give yourself enough time to fill out an online quote request and pre-approval forms offered by a variety of lenders. If the initial information looks promising enough, don’t be afraid to call providers that don’t offer online applications on the phone. Gather several quotes so that you can make an informed decision to benefit your finances for many years to come.
Finally, pay attention to the fees that crop up as your mortgage is finalized. While fees required by outside bodies, such as those charged by the local or county government, aren’t often negotiable, many others are. You may be able to argue down fees such as the loan origination and document preparation charges, title search and insurance costs, and many others.
Recommended Companies in Rhode Island
Rhode Island has several of lenders offering mortgages within its borders. Keep these options in mind as you begin your search.
Quicken Loans functions as an online marketplace for mortgages, a place where prospective borrowers can seek out loans from a variety of providers.
The wide range of possible lenders involved means there are many mortgage options available, from traditional home loans with fixed and adjustable rates to more specialized VA, USDA, and FHA loans. The Quicken Loans headquarters office in Detroit has been awarded an A+ rating from the Better Business Bureau and a customer review rating of 4.5/5 stars.
As an online-only provider of personal banking services as well as home loans, Ally Bank has the experience to reliably offer streamlined, intuitive digital processes for a variety of mortgage-related tasks.
Ally features competitive rates, a variety of home loan options and loan advisors available by phone Monday-Friday, 8 a.m.-11 p.m., and Saturday, 10 a.m.-4 p.m.
Offering low rates and a wide variety of mortgage programs, J.G. Wentworth also provides potential and current customers with top-notch customer service, a variety of home loan programs, and a fast application process.
A strong lender reputation score, long track record, and other positive attributes are clear in our review of J.G. Wentworth, in which the lender received a perfect 5/5 star rating.
Better Mortgage offers an entirely digital mortgage process that includes an easy and fast quote process (the lowest time to receive a quote is three minutes) and no commissions or hidden fees.
The company also features verified pre-approval in as little as 24 hours. The lender features a wide variety of different home loan products and a strong customer experience ranking of 9.5/10 in our assessment.