How Mortgage Rates Work (and What Impacts Them)
- Andrew Georgitsis
- Jul 25
- 2 min read
📈 How Mortgage Rates Work (and What Impacts Them)When buyers hear "rates are up" or "rates are low," what does that actually mean—and how does it affect you?
💰 What Is a Mortgage Rate?
Your mortgage rate is the interest your lender charges you to borrow money for your home. It directly affects your monthly payment and the total amount you’ll pay over time.
Even a small change in rate—like from 6.75% to 6.25%—can mean hundreds of dollars per month in savings.
🧠 What Impacts Mortgage Rates?
Rates aren’t set by your lender alone. They’re influenced by broader economic forces and your personal financial profile.
Here are the key factors:
📊 National/Economic Factors
1. Inflation Higher inflation → higher rates. Lower inflation → lower rates.
2. Federal Reserve Policy
The Fed doesn’t directly set mortgage rates, but its decisions on short-term rates heavily influence them.
3. Bond Market Performance Mortgage rates follow the yield of the 10-year Treasury bond—when it rises, so do rates.
👤 Personal Factors
1. Credit Score
Higher score = lower rateLower score = higher risk = higher rate
2. Loan Type & Term
VA/FHA/conventional loans and 15- vs. 30-year terms can carry different rates.
3. Down Payment
Larger down payments may help lower your rate.
4. Points Paid You can "buy down" your rate with upfront points (fees).
🎯 What Should You Do About Rates?
You can’t control the market—but you can control your readiness. That includes improving your credit, comparing lenders, and understanding what rate range fits your budget.
I can connect you with excellent lenders to walk you through all your options. No pressure, just info.
—
Andrew Georgitsis DRE#02266192
📧 info@socalrealtyandinvestments.com 📞 866-322-5487
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