If you're trying to buy a home in Wilmington, Hockessin, Pike Creek, or anywhere across New Castle County, affordability is probably what keeps you up at night. And as you watch mortgage rates tick up again lately, it's fair to wonder if you should just hit pause and wait for them to come back down.
For now, though, rates are headed the other way. Mortgage News Daily data shows rates have risen this year, and there are a number of reasons why. Mortgage rates are impacted by the situation overseas, economic data, inflation numbers, oil prices, and even decisions from the Federal Reserve, who recently decided to hike their Fed Funds Rate, which often affects mortgage rates too.
As Danielle Hale, Chief Economist at Realtor.com, explains, the pressure on mortgage rates was here even before the Fed rate hike, and it doesn't show signs of relenting.
That's probably not what you wanted to hear if you're house hunting in Northern Delaware or the nearby Pennsylvania suburbs. But it doesn't mean there's nothing you can do. While you can't control where rates go from here, you absolutely can control several things that shape the rate you actually get. So where should you focus? Let's walk through it.
Work on Your Credit Score
Your credit score plays a big role in the rate you qualify for, and even a small improvement can make a real difference in your monthly payment on a Delaware home. As Freddie Mac puts it, generally, the higher your credit score, the more options will be available to you, including better loan terms and a lower interest rate.
Make sure you do what you can to keep your credit score up. If you're not sure where your score stands right now, or how to improve it before you start touring homes in neighborhoods like Greenville, North Wilmington, or Newark, talk to a trusted local loan officer.
Explore Your Loan Options
The type and term of your loan both affect your rate. Conventional, FHA, VA, and USDA loans each come with their own requirements and rates, and your term, whether that's 15, 20, or 30 years, changes both your monthly payment and the total interest you'll pay over time. The structure matters too. A fixed-rate loan holds the same rate throughout the life of the loan, while an adjustable-rate loan usually starts lower and can move later on.
Bankrate explains that rates on fixed-rate loans are typically higher than introductory rates on adjustable-rate loans, since the fixed-rate lender takes on the risk that rates could increase during the loan's term. Government-backed FHA, VA, and USDA loans sometimes have lower rates because they carry a government guarantee or insurance that reduces the lender's risk.
It's worth exploring your options with a lender to see what makes the most sense for your situation, whether you're a first-time buyer looking at a townhome in Pike Creek or settling into a single-family home in Hockessin. Balance your goals, your possible rate, and any tradeoffs before making a decision, and consider talking to multiple lenders to see how the options compare.
Consider a Newly Built Home
Another path to a lower rate comes down to the kind of home you buy. Many builders are buying down mortgage rates, which lowers your monthly payment. It's one of the ways they're working to attract buyers and sell their inventory.
According to Realtor.com, buyers of newly built homes landed a lower average rate last quarter than buyers of existing homes. If a lower rate is your goal, it may be worth asking your agent to point you toward new construction communities across New Castle County or the nearby Pennsylvania suburbs that are offering this kind of incentive right now.
Bottom Line
You can't control where mortgage rates go, but you can control your credit, your loan, and the kind of home you buy across Delaware or Pennsylvania. Working with a trusted local lender can help you lock in the best rate you qualify for.
If you're thinking about a future move and want to understand your timing, your options, and what today's rate environment means for your specific situation, our Map Your Move approach is designed to walk you through exactly that, no pressure, just clarity. As a real estate team serving clients across Maryland, Delaware, and Pennsylvania, Hudler Homes is here to help you find a path forward that fits your budget and your goals.
When you're ready to make a move in Delaware or Pennsylvania real estate, let's connect.
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