There is a “very hot” housing market in Delaware, Zillow reports, with a median listing price of $284,000 in the state and a Zillow home value index of $237,300. This is somewhat higher than the national median listing price, which is $275,000, and the national home value index of $220,000.
These numbers are substantially higher now than they were just a few years ago, demonstrating the strong growth the Delaware housing market is experiencing. Today’s housing market in this state seems to be stronger than it was during and immediately after the downturn that started in American housing markets around 2007.
Delaware homes have regained the value they lost in the downturn during the Great Recession and appear to be well-positioned to continue growing rapidly. Homes in this state reached their lowest Zillow value on record in September 2012, at just $184,000. This is a little higher than the median Zillow home value index for US homes that month, which was $151,000. As of February 2019, the median home value index for Delaware homes is $242,000, higher than the US market value of $226,000.
When shopping for a home in Delaware, it’s helpful to remember that the national economy does have an impact on mortgage and refinance rates. Local economics are a significant factor as well, in addition to Delaware state laws, foreclosure rates, average home values, and lender competition for new mortgages.
There are other factors that can impact mortgage and refinance rates for individuals, too. In this article, we will review and explain how some of these factors influence rates so prospective borrowers can create their own plans and successfully navigate the mortgage loan process in Delaware. We also offer more advice on how you can get the best possible mortgage rates in Delaware when you decide to close on your purchase.
Current Mortgage & Refinancing Rates in Delaware
6 Critical Elements That Affect Mortgage Rates & Refinance Rates in Delaware
There are many different factors that impact mortgage and refinancing rates in Delaware. It is important to learn more about how these different elements influence rates, because even small differences can result in savings of several thousands each year for Delaware borrowers.
Down payment
While applying, remember that a higher down payment can help you achieve a lower mortgage rate. Lenders carefully consider what loan applicants are able to pay down on a new mortgage. With a higher down payment, borrowers represent reduced risk for the lender and end up taking on a smaller overall loan amount. Applicants paying at least 20 percent down are typically considered to be low risk and usually receive the best overall rates.
Credit score
In the mortgage application process, borrower credit scores are typically one of the most significant factors for receiving a great offer. Borrowers with high credit scores are usually considered to be less risky than other applicants, while low scores often make it more challenging to receive a low rate. These borrowers will probably end up with less favorable terms than other applicants. In other words, having a great credit score matters.
Loan term
The length of the loan term is another important factor that determines your rates. Typically, shorter loans have the lowest rates and overall costs. This does usually mean higher monthly payments, though, which is something applicants should keep in mind. Buyers who are comfortable paying more each month can save tremendously on the overall cost of their home over a shorter term. Longer terms can also make home buying more affordable, though, since it may result in a more manageable monthly payment.
Down payment
As you think about applying for a mortgage, keep in mind that lenders also carefully consider what applicants are able to pay as a down payment on their home purchase. Higher down payments mean a smaller overall loan and a reduced risk for the lender. Buyers who can pay at least 20 percent are usually considered to be fairly low risk, so they receive the best rates.
Refinance type
Since borrowers may pay different rates depending on the type of refinance they choose, considering multiple lenders and offers may make the best financial sense. Cash-out loans may have different rates than fixed and adjustable-rate refinance loans, for instance. It pays to look around rather than signing up with the first lender you receive a quote from.
Loan size
Bigger loans on more expensive homes may be a greater risk to the lender because they are required to provide more capital to finance the purchase. Low-value homes may be located in places where there is limited economic activity, which some lenders believe presents a higher risk. In either situation, borrowers should shop at multiple lenders to get the best deal, particularly for large and small loans.
Learning more about the market in Delaware can help you weigh these factors and determine the best possibilities for your own purchase.
How to Get the Best Mortgage & Refinancing Rates in Delaware
Receiving multiple quotes helps applicants find the best mortgage rates and refinancing in the state of Delaware. Picking the first lender who provides a quote can result in leaving money on the table. In fact, up to 47 percent of rate shoppers visit only a single lender for a quote. As a result, many borrowers end up paying tens of thousands of dollars more on the cost of their homes.
In a single year, you can spend several thousand dollars less than you would otherwise if you decided to shop around instead. Applicants who want to consider more than one offer but aren’t sure where to start can consider this process for finding the best mortgage rates in Delaware:
- Calculate the full cost of each loan offer and compare different lenders: It’s more than just looking for several quotes. You also need to add-up the full costs of each loan possibility in order to create a fair and sensible comparison. The best type of loan for you may not have the best rate overall, either. No two borrowers are alike and not everyone has identical financial goals. For some borrowers, FHA loans may make the most sense, while others may want adjustable-rate loans instead. It helps to research several lenders and compare different types of mortgages offered by each one before making a final decision. Overall costs can include underwriting, closing costs, fees, prepayment penalties, and more. Getting the full picture is important with mortgages, and applicants should ensure that they know the full costs before signing on the dotted line. Ask for a Good Faith Loan Estimate and Closing Disclosure form after applying for a loan.
- Be willing to complete multiple applications if necessary: Although each new lender you consider does take time and effort to research, it is important that applicants are willing to complete more than one application in order to find the best possible lender and loan option. Ideally, choose more than two lenders, since just applying with two may result in missing out on more affordable alternatives or loans that are a better fit for your goals. Since different lenders offer their own bonuses, features, and incentives to close, it makes sense to shop. For instance, borrowers who want to save more money upfront can have their closing costs included in their loans or have underwriting fees waived to reduce costs at closing.
Recommended Companies in Delaware
Home buyers in Delaware have many different options for mortgage lenders. As you apply, look for multiple quotes and complete more than two applications if you can. This will give you more confidence that you are getting the best possible deal. Here are a few of our top recommendations in Delaware:
- Lending Tree: An online marketplace allowing you to compare more than one lender and see what offers are available to you as a borrower.
- Rocket Mortgage: Rocket provides approval information within minutes and makes it easy to upload your information to almost instantly see the rates you qualify for.
- Quicken Loans: Thanks to their 90-Day RateShield Approval program, you can begin your home search with a rate that’s already fixed. When the market changes and rates increase, you’re protected against these higher rates.
- Magnolia Bank: (also known as closeyourownloan.com): This lender provides instant online access to rates so you know exactly what you’ll pay for your mortgage.
