Mortgage Rates Maryland: How To Get The Best Rates

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Thanks to low rates and high demand, the Maryland property market is thriving. If this trend keeps up, median home values may keep rising, making it harder to buy a home. Knowing the local mortgage and refinance rates can help you find the best deals in this competitive market.

In this guide, we cover all you need to know about mortgage rates in Maryland. In addition to the most current mortgage and refinance rates, we also share top tips on how to get the best rates & APR.

Mortgage Options In Maryland

Most American homebuyers have three kinds of loans to choose from. Each of them has its rate schemes as well as pros and cons. In this section, we go over their specifics.

Conventional Home Loan

Conventional mortgages are commonly offered by banks and private mortgage companies. They typically adhere to loan amount limits set by the Federal Housing Finance Agency.

Loan limits differ by area – for most of Maryland, the limit is at $548,250. However, five Maryland counties have higher limits of $822,375.

Conventional mortgages are split into three major types. Here, we discuss each of them.

Fixed-Rate Mortgage

A fixed-rate mortgage features an interest rate & APR that won’t change regardless of market fluctuations. The constant rates mean your monthly payment amount will also be fixed for the entire loan’s life.

Since fixed-rate mortgages are predictable and easy to plan for, they’re popular with first-time homebuyers and long-term financial planners.

However, their interest rates & APR are relatively higher and you can’t lower them without refinancing.

Adjustable-Rate Mortgage (ARM)

The interest rate & APR on an adjustable-rate mortgage isn’t fixed. Your ARM rate & APR usually changes annually, based on a lender-chosen market index.

In an ARM, the lender gives you an introductory period with fixed mortgage interest rates at the beginning of the loan. This introductory period can last anywhere from 3 to 10 years.

The lower introductory rate on an ARM makes it good for short-term savings. However, the rate unpredictability may be risky if your budget is tight.

Jumbo Mortgage

Not all properties are priced below lending limits. Lenders offer jumbo mortgages to purchase expensive homes. If you take a jumbo, you can exceed loan amount limits – at the cost of a higher rate & APR.

Government-Backed Loan

The federal government offers mortgage loan programs to boost the homeownership rate in select demographics like low-income borrowers and military personnel. They typically offer affordable rates and relaxed credit rating requirements.

The three major government mortgage programs are:

FHA loans: Designed for lower-income borrowers, this loan type requires a lower credit score compared to conventional mortgages. However, an FHA borrower must pay for mortgage insurance fees for the loan’s entire life.
VA loans: To get this zero-down mortgage loan, you must be an active or retired military member. As a replacement for mortgage insurance fees, you’re required to pay an upfront cost called a funding fee.
USDA loans: This loan is only eligible if you’re buying a home in USDA-approved rural areas. As a USDA borrower, you’ll receive a zero-down loan with lower mortgage insurance fees.

Mortgage Refinancing

Taking a refinance entails getting a new mortgage to pay off your previous one. This is usually done to get lower refinance rates or leverage your home equity.

The two major types of mortgage refinancing are:

Rate and term refinance: If you want to change your loan terms, take this refinance. With this type of refinancing, you can change your ARM into a fixed-rate mortgage or shorten your loan’s length to get better rates & APR.
Cash-out refinance: Cash-out refinancing allows you to turn your home equity into cash on hand. This type of refinancing works by providing you a loan that’s larger than your current loan balance. Once you pay off your current loan, any money left over is yours to use for other needs.

Current Maryland Mortgage Rates

Historically, mortgage rate trends in Maryland have been on par with national average mortgage rates. In this table, we provide access to the latest Maryland mortgage rates. The rate data on this table are taken from America’s major mortgage lenders. We update this table daily!

Today’s Mortgage Rates in Maryland

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Keep in mind that your rates & APR may vary depending on the lender. These rates may also change without prior notice.

Looking for a personalized Maryland mortgage rate & APR estimate? Input your financial details into the rate tool above, and we’ll calculate a Maryland mortgage rate & APR estimate just for you!

First-Time Homebuyer Programs In Maryland

Through the Maryland Department of Housing and Community Development (DHCD), the state offers several first-time homebuyer assistance options. To qualify for these state-sponsored offerings, you must fulfill the requirements:

Purchase a home to be your primary residence
Choose a property within state home price limits
Have a combined household income that falls under eligibility limits
Complete a homebuyer course
Satisfy credit score requirements

1st Time Advantage Loans

Qualifying for this Maryland mortgage program allows you to receive a state-sponsored loan with the lowest rates available. This program is broken down into three categories:

1st Time Advantage Direct: This subtype only offers a low-rate mortgage without additional assistance loans. However, Direct loans have the best rates.
1st Time Advantage 5000: This loan offers $5,000 in down payment, closing cost, and lender fees assistance. The money comes in a zero-interest second mortgage that doesn’t have to be paid until your main mortgage ends.
1st Time Advantage 3%: The down payment and closing costs assistance on this loan is valued at 3% of the mortgage. Similar to the 1st Time Advantage 5000, these funds come in a deferred-payment zero-interest loan.

Flex Loans

Unlike the 1st Time Advantage, the Flex series of state-assisted mortgages are available for both first-time and repeat homebuyers. The Flex loans are also divided into three categories:

Flex Direct: The Direct variant of the Flex loan offers the best rates, but no additional assistance.
Flex 5000: This variant boasts $5,000 in down payment assistance with a zero-interest second mortgage.
Flex 3%: The 3% loan gives you a down payment grant worth 3% of your mortgage. However, unlike the other variants, these funds do not need to be repaid.

Buying A Home In Maryland

In a fast-moving housing market like Maryland, speed is essential. Spending too much time wondering what to do can mean your dream home getting snatched up by other buyers.

To prevent this from happening, we’ve compiled a home buying guide for you!

Step 1: Qualify For A Loan

The first thing you should do is to make sure you can purchase a house. A good way to see your financial readiness is by applying for a mortgage.

Part of the application process is pre-approval, where lenders will examine your financial health and determine your mortgage eligibility.

If you pass, you’ll receive a pre-approval letter. This document contains key details about your loan – the maximum amount, interest rate, and mortgage type, among others.

Step 2: Find A Realtor With Local Experience

Having a real estate agent with local experience can help immensely. While their main duties are showing you houses and securing the best deals, you can also leverage their area expertise.

Your agent can advise you on the area’s average real estate prices, commute times, and other important details.

Step 3: Search Local Listings

Most good house hunts start at the neighborhood level. Once you find a neighborhood that fits your budget and lifestyle, start searching property listings in the area.

A good piece of advice is to pick an affordable house that fits your needs. Any money left from the purchase can be used for home improvement projects.

Step 4: Make The Offer

In a competitive market, you need to be prepared for other buyers. To make your offer stand out, consult your real estate agent – typically, they’ll advise you to make an offer above the listed home value.

A larger offer helps catch the seller’s eye, increasing the likelihood of you getting the home.

Step 5: Schedule Inspections And Appraisals

Before closing your property purchase, you need to perform two due diligence steps. Home inspections allow you to ensure the property is in top condition. Meanwhile, appraisals help you determine the property’s actual value.

Step 6: Finalize The Purchase

Prior to closing day, you need to prepare the money to pay the closing cost and lender fees. Be sure your real estate agent is there when you sign the paperwork. Once the paperwork is complete, you’re ready to move in!

How To Get A Better Mortgage Rate In Maryland

Even the smallest mortgage rate reduction can save you thousands of dollars down the line. To get the best rate & APR on your loans, you can follow these top tips before sending your mortgage applications!

Provide A Larger Down Payment

Paying a larger down payment allows you to skip mortgage insurance fees. Larger down payments also reduce your loan balance and drive your rates down, which allows you to save in the long run.

However, you should do the math and calculate how much you’ll save from the rate reduction.

Shorten Your Loan Term

Shorter loan terms allow you to save in two ways:

Lenders are more likely to give you lower mortgage rates.
Fewer payments mean fewer interest rate fees.

However, your monthly payment amount will be larger. If you’re thinking of shortening your loan, be sure you can pay the larger expenses first.

Compare Offers From Multiple Lenders

Different mortgage companies offer different interest rates and fees. To compare lender offers, you can request loan estimate documents containing key mortgage details.

Try to compare at least three lender offers and see which one gives you the best value.

Closing Thoughts

If you’re looking to live in Maryland, be prepared to compete in the housing market. Knowledge of the local mortgage rates and how to buy a home can give you an edge in finding the best-valued deals.

To find the best mortgage for your Maryland home, Wesley LLC is here to help. Contact our team today for a mortgage consultation!