By Mike Lentz | The Mike Lentz Team - Keller Williams Realty
Advertised mortgage rates are national averages that don’t reflect your specific financial situation. Your actual rate depends on your credit score, debt-to-income ratio, down payment size, and loan type. In South Jersey, working with a local lender who understands your unique circumstances is the only way to know your real number.
You may have seen the headlines saying mortgage rates have climbed to the highest point since January 2025. If that’s left you reluctant to buy a home, here’s what you need to remember: advertised mortgage rates aren’t necessarily the number you’d get.
It’s a common misconception that the rate you see in the headlines is the same one you’d get when you buy. In reality, mortgage rates shift often, and the rate you actually end up with can vary a lot from what you see or hear about.
What Determines Your Real Rate Beyond Advertised Mortgage Rates?
Advertised mortgage rates and “real rates” aren’t always the same. That’s because real rates are based on your specific situation, which includes your overall finances and goals. The rates you see in the headlines can’t possibly reflect that.
That’s why only a lender can tell you what your real rate will be. To figure out your unique number, they’ll look at:
Your Credit Profile
Your credit score includes your payment history (if you’ve made late payments and how often), credit utilization (are your accounts maxed out, or do you have available credit?), and the length of your credit history (how long have your accounts been open?). Someone with an exceptional credit score may qualify for a better rate than the advertised mortgage rates in the headlines.
Your Debt-to-Income (DTI) Ratio
This is calculated by dividing your monthly debt payments by your monthly income before taxes to come up with a percentage. The higher your DTI, the higher your rate could be, even when advertised mortgage rates look low.
Down Payment and Loan-to-Value (LTV)
Your down payment is the percentage of the home’s price you will put down. The LTV (Loan-to-Value) is the percentage of a home’s sales price that equals your mortgage.
Loan Type and Term
Your loan officer will walk you through different loan options based on what you qualify for. Mortgage rates can vary between different loan products and programs. The headline number is usually a 30-year fixed average, so advertised mortgage rates may not match the loan you end up using.
What Else Can Push Your Rate Below Advertised Mortgage Rates?
Even after you find a home you love, other things can have an impact too. While advertised mortgage rates give you a starting point, your actual rate can be adjusted through various strategies.
A mortgage rate buydown helps you get a lower mortgage rate, and by extension, a lower monthly payment, by paying an upfront cost. Sometimes a seller, builder, or another party may even offer to cover that cost themselves as an incentive for you to buy.
Sellers are allowed to pay buyer closing costs according to most loan program guidelines. Seller-paid closing costs can add up to thousands of dollars, which can free up some cash for you to increase your down payment, pay down debt, or make other financial adjustments to try to get a better rate.
There’s a lot that can ultimately have an impact on your actual rate.
Get Pre-Approved to See Past Advertised Mortgage Rates
If you want to know if your number could be higher or lower than the headlines on social, you need to talk to an expert. A simple conversation with a loan officer can help you determine when you’ll be ready to buy, how much you can borrow, and of course, what your real rate will be.
Your lender may recommend a pre-qualification and pre-approval:
- Pre-qualification is a general estimate of what you might be able to borrow based on self-reported information.
- Pre-approval is actually a conditional commitment from a lender based on verified information.
Just know that, of the two, the pre-approval process gives you a more accurate picture of your options than pre-qualification. Bankrate gives a quick comparison so you can see why:
How To Get Ready for the Conversation
Ask your lender what documents you’ll need to gather for that conversation. Keep these questions in your pocket too:
- What will I gain or lose by waiting to buy a home for 3, 6, or 12 months?
- Will I get any tax advantages by buying a home, and what are they?
- What’s the benefit of buying a home and starting to build equity now versus waiting? How does that impact my finances in the long run?
- How will rate changes in either direction affect me?
Once you find out your real rate, not just the advertised mortgage rates, maybe you can buy now. Or maybe you still need to wait. But at least you’d know your options and can make an informed decision.
Why Advertised Mortgage Rates Don’t Tell the Whole Story
Headlines and social media make today’s rates sound high. But you have to remember, advertised mortgage rates and your actual rate could be different. The only way to know what your rate could be is to talk to a trusted lender.
With the right help, you can find out what your real rate is and where it can take you.
If you want to talk through what this means for your situation, schedule a quick call and we’ll walk through it together.
For the full picture in your county, see our county market reports for Camden, Burlington, Gloucester, Salem, and Cumberland counties.
