Arizona Mortgage Rate

While mortgage rates fluctuate based on the movement of Federal interest rates, they also vary from state to state and county to county. In general, the ranges do not vary significantly; however, a tenth of a percentage can make a difference in what the borrower pays over the life of the mortgage. Within the same market, rates can vary by a full percentage point or more.

Rates also vary based on the type of mortgage desired. Fixed mortgages generally offer lower rates, both for 15 and 30 year loans. Rates for adjustable rate mortgages, usually referred to as ARMs, vary depending on how many years the base rate is in effect and on what the current interest rates are at the end of that stable period. Arizona's rates are fairly average for today's markets.

Rates Vary by Location

Some of the reasons that mortgage rates fluctuate from county to county include the lender's perceived risk levels in certain areas, current building costs, and other local factors, including lender issues. As a result, shopping for the right lender should most definitely include at least three options. There can be a dramatic difference between rates at banks in the same neighborhood, between national mortgage lenders with local offices, and among online lenders.

When doing comparative shopping, the borrower should take into account more than just the interest rate of the loan. Other costs will apply, the largest of which are closing costs. Closing cost is simply defined as the amount of money the buyer must bring to the actual signing of the contract. It represents such things as taxes, surveys, title searches, recording fees and doc stamps, and points. If the closing costs from one lender are much higher than those from another lender, the buyer may be paying too much for the mortgage.