Do I Have the Best Mortgage Rate?

One of my first-time home buyers recently asked me a question I hear often: “Do I have the best rate possible?” It’s a great question — and the answer depends on what “best rate” actually means to you.

In my experience, there are two ways borrowers typically think about it:

• Best rate based on how you qualify
• Best rate based on current market pricing

Best Rate Based on How You Qualify

Mortgage rates aren’t one-size-fits-all. Lenders price loans based on risk factors — and the two biggest are your credit score and your loan-to-value ratio (how much you’re borrowing relative to the home’s value).

These adjustments are called Loan Level Price Adjustments (LLPAs). They’re built into conventional loan pricing by Fannie Mae and Freddie Mac. Generally speaking, the higher your credit score and the more equity or down payment you have, the better your rate.

With FHA loans, pricing is more straightforward — there are fewer score-based adjustments. But mortgage insurance premiums (MIP) are a factor, and putting at least 10% down can reduce how long you pay MIP.

If getting the best possible rate based on qualifying is your goal, start the process early. There’s often more room to improve your position than people realize — paying down certain debts, correcting errors on your credit report, or saving a bit more for down payment can all move the needle. I enjoy helping clients build a plan, whether that takes a month or a year.

Best Rate Based on Market Pricing

Even once your qualifying profile is set, there’s still a choice to make: how do you want your rate priced?

Mortgage rates come with a trade-off between your interest rate and your closing costs:

• Paying discount points (higher upfront cost) buys you a lower rate
• Taking a higher rate can generate lender credit to offset closing costs
• Par pricing falls in the middle — no points paid, no credit received

Which is right for you depends on how long you plan to keep the loan and how much you want to bring to closing. There’s no universally “best” answer — it’s about what fits your situation.

One More Thing: Rates Move

Mortgage rates are a moving target, sometimes changing multiple times in a single day. The rate you’re quoted today isn’t guaranteed until it’s locked. Once you lock, your rate is protected through closing — but if rates drop after you lock, you’re generally committed to the locked rate unless your loan program allows a one-time float down.

If you’re buying, you can typically lock once you have a signed purchase agreement and a target closing date. If you’re refinancing, you can lock once your closing timeline is reasonably clear.

How I Shop Rates for You

No lender can honestly claim to have the “best rate” — it’s actually against the rules to advertise that way, because no one can know what every competitor is offering at any given moment.

What I can do is run your scenario through a pricing engine that compares rates across multiple lenders in real time, so we find the most competitive option available to you at that moment through New American Funding.

If you’re buying or refinancing a home in Washington State and want to know where you stand, I’d love to help. Request a rate quote here or reach out directly — let’s talk through your options.