Are you a future first-time homebuyer or looking to find your next home? If you’re new to homeownership, there are a lot of terms and concepts with which you might be unfamiliar. One of the most important concepts future homeowners should know about is mortgage rates.

If you’re ready to learn a few pointers and make your homebuying experience smoother, you’ve come to the right place. Doing your research before finalizing a mortgage can help you immensely. We’ll go over what a mortgage is and how mortgage rates work below.

Here are three tips first-time homebuyers should know about mortgage rates.

Mortgage Rates Are Predetermined

The mortgage rate on your loan is stated as a percentage of your total balance and is paid off monthly, along with your principal payments. Unfortunately, a lot of factors outside your personal power determine mortgage rates. So be sure to shop around for competitively priced rates. Your overall mortgage rate is partially set by forces in the market. Some of these forces include:

• Economic and job growth
• Inflation
• Unemployment rates

You could save thousands of dollars over the life of your loan if you buy at the right time. Keep tabs on what national mortgage rates are doing. It’s important to understand that mortgage rates and federal interest rates move independently of each other, but typically in the same direction.

You Can Help Your Rate

To get the best possible mortgage rate, you’ll want to ensure your credit score and financial history are in good shape. Here are what lenders may take into consideration when creating your rate:

• Credit score
• Debt
• Income
• Downpayment
• Loan term
• Loan type

These will each play a role in the rate a lender might offer you. It’s important to know that lenders tend to offer higher rates the riskier you are as a borrower.

The Lender Can Make All the Difference

Finding the right lender is important, because mortgage rates vary from lender to lender. Before making a decision, you should always do a background check on your lender. Just like lenders want to make sure you’re a suitable candidate, you’ll want to make sure you’re getting the best rate. Don’t be coy about shopping around—it’s worth it in the long run. Asking your friends and family is also a smart move. You never know who’s going to have valuable info from which you can benefit!

 If you’re a first-time homebuyer, you may be eligible for a loan from South Dakota Housing. The First-Time Homebuyer Loan program provides competitive interest, fixed-rate mortgage loans and cash assistance for homebuyers purchasing their first homes. Learn more about this awesome opportunity.