If you’re not an avid business or real estate news reader, you’re probably unaware of the current lowest mortgage rates in the USA. Simply typing in mortgage interest rates USA gives you a bevy of sites to choose from (most notably bankrate.com), but what does that tell you about what’s available for you in terms of current mortgage rates or the best mortgage rates? Do the lowest mortgage rates in the USA apply to you? You’ll be surprised to learn that you may not qualify for the lowest rates, for a number of reasons.

Mortgage rates are factored by more than just your credit score. Although your FICO score plays a huge part in what the lender offers you, the lender doesn’t always begin with the lowest rates in the USA. In fact, some lenders may not begin their rate offerings at the lowest in their city. Every city, town and area has its own base mortgage rate and it’s usually this number that factors into what lenders in your area can offer. This interest rate is based upon the housing market in your district, the prime rate and other factors. Buying a home in Beverly Hills, for instance, wouldn’t have the same interest rates as a home in Detroit, MI. Most lenders, however, guide their interest rates off the prime rate. At the time of this writing the prime rate, a standard set by the Federal Reserve, is 3.25%. This is the scale by which most lenders begin negotiating, or setting, their interest rates for mortgage loans.

Beginning with your FICO score, a bank can either add interest or deduct interest rates from the prime. For example, if you had an 850 FICO score (excellent credit score), a lender may offer you a 3% mortgage, it you choose an ARM (adjustable rate mortgage). If you choose a fixed rate mortgage, you’re probably going to look at 4%+ as an interest rate. There are other factors a lender considers, however. If your debt to income ratio (the amount of monthly debt you have divided by the gross monthly income) is higher than 36%, you’re probably going to be offered a higher interest rate. The best possible scenario is a debt to income ratio of 28% or lower and a FICO score above 750. It’s a good idea to request your credit report with the FICO score so you’re able to negotiate with lenders before applying for a mortgage. Remember that every inquiry into a new credit line will lower your credit score.

The best mortgage rates, USA, can offer are ones which coincide with your needs as a family. Be sure to calculate ARM, Fixed and a variation of both; i.e. calculate a 2/30 ARM (2 years variable, 30 year fixed) and variations of that type of loan. You’ll find most lenders will have their offers displayed prominently on their web site. It’s a good idea to negotiate as much as possible before signing any paperwork.

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