We’ve all seen news stories about mortgage rate trends. They tend to generate a lot of headlines, because they are ever-changing.

But the rates cited by mainstream news sources are averages determined by industry-wide surveys. So they don’t apply to all borrowers. That’s why it’s wise to get a mortgage rate quote for your New Jersey home loan.

Getting a quote from a lender is an important preliminary step in the borrowing process. It can help you with everything from budgeting to house hunting. Here are five things you should know about getting a mortgage rate quote in New Jersey.

1. There are several factors that can influence your borrowing costs.

The rate you receive on a home loan can differ from other borrowers, due to a number of factors. Some of the variables that can influence rates include:

  • The borrower’s credit score
  • The size of the down payment
  • Occupancy (second home vs. primary residence)
  • The loan type and rate structure (fixed vs. adjustable)
  • The size of the loan (jumbo vs. conforming)

This underscores the importance of getting a mortgage rate quote when buying or refinancing a home in New Jersey. It helps you to budget and plan accordingly.

2. Home loan rates are constantly changing.

Mortgage rates are in constant flux. They are influenced by a variety of economic and market forces, and these forces are constantly changing. That’s why interest rates for home loans change from one week to the next (and even from day to day). Getting a New Jersey mortgage rate quote lets you know what your borrowing costs will be at the time you take out the loan.

3. Rate quotes and pre-approval can increase your chance for success.

Getting a mortgage rate quote in New Jersey, and getting pre-approved for a certain loan amount, can help you during the house-hunting stage. It helps you narrow your housing search to a specific price range, based on your financing capacity. You’ll be a more efficient home buyer as a result.

4. You’ll probably have the option to pay points.

There are certain things borrowers can do to qualify for a lower rate on a mortgage loan. Maintaining good credit can help, but that’s not all. In many cases, borrowers can also pay “points” to secure a lower rate on a home loan in New Jersey.

A point is equal to one percent of the base loan amount. For example, one point on a $400,000 mortgage loan would come out to $4,000.

Paying points is a smart strategy in some scenarios, because it allows the borrower to “buy down” the interest rate. Basically, you’re paying more money up front in exchange for a lower rate. This could potentially save you money over the long term.

When getting a mortgage rate quote in New Jersey, your loan officer can tell you how much you might be able to save if you paid points versus no points.

5. Mortgage rate quotes usually have an “expiration date.”

It’s important to understand that New Jersey mortgage rate quotes typically remain in effect for a limited period of time. This is known as the lock term. It’s the length of time that the quoted rate will remain valid.

A lock protects you, the borrower, from interest fluctuations that might occur while you are going through the loan process. This period could range from 10 days to 60 days.

A longer rate lock period might mean that you have to pay a higher rate, or additional points. A shorter lock term could help you secure a lower mortgage rate. As with other aspect of the lending process, you have options.