Compare Current Mortgage Rates in Delaware

Delaware mortgage rates play a big role in how much home you can afford — and how much room you’ll have in your budget for everything else. 

When you start shopping for a home, you quickly learn how important interest rates are. The lower your rate, the more house you can afford. If you’re refinancing, a lower rate will give you more financial flexibility. So let’s take a look at how you can grab Delaware’s lowest mortgage rates.

Learn More: What Is a Mortgage? Everything You Need To Know

If mortgage rates seem like a moving target, that’s because they’re largely shaped by forces you can’t control: 

• Inflation: The Federal Reserve uses monetary policy to keep inflation under control. If inflation is high, the Federal Reserve increases interest rates to pump the brakes on the economy. When inflation gets too low, the Federal Reserve cuts rates to encourage spending and keep the economy growing.
• Unemployment: Low unemployment can be a good thing — it can signal that most people who want to work have jobs. It can also mean that most of the people who wanted jobs but couldn’t find one have quit looking. Low unemployment can increase inflation as companies compete for workers by offering higher pay. When that seems to be happening, the Fed will try to push rates higher to nudge unemployment up.
• Global events: Problems overseas can impact interest rates at home. Wars, pandemics, and typhoons can disrupt supply chains, increase commodity prices, and accelerate inflation. Geopolitical conditions also affect where investors put their money and what returns they demand.

Many factors influence interest rate differences from state to state. Here are some reasons why mortgage rates in Delaware might be different from rates in Rhode Island or Arkansas for the same type of loan:

• Business expenses: Office space, salaries, insurance, and regulations are different from state to state, impacting lender costs and potentially influencing rates.
• Economic stability: Areas with fewer job opportunities and declining populations pose a greater risk of borrowers defaulting on their mortgages. Investors may demand higher rates to buy these loans. Conversely, rates may be more favorable in states with strong economies.
• Foreclosure laws: Lenders may charge higher rates in states that make it harder to foreclose or recoup their total losses after foreclosing.
• Competition: Fewer lenders in a state can lead to higher rates, especially if borrowers aren’t shopping around and getting quotes from both local and online lenders.
• Consumer demand: If buying or refinancing in the state becomes more or less popular, lenders may increase or decrease rates to manage their supply of workers and capital.
• Special programs: More affordable loans are often available in low-income, rural, minority, or disaster-impacted communities. Some states have more of these areas than others.

These factors help explain why a 30-year fixed-rate conforming loan in Wilmington or Newark, Delaware, could have an interest rate of 7.125% while the same loan might cost 6.875% in St. Louis, Missouri. However, state averages don’t always differ and can be similar to national averages.

Yes, Delaware has several first-time homebuyer programs. The Delaware State Housing Authority (DSHA) offers the Welcome Home and Home Again programs to make homeownership more affordable for low- and moderate-income buyers. 

Welcome Home is for first-time buyers only, while Home Again is for repeat buyers and first-time buyers whose income is above Welcome Home’s limits.

Each offers several types of assistance, and some can be combined if you qualify:

• Smart Start: Provides a 30-year conventional, FHA, VA, or USDA mortgage with below-market rates for Welcome Home buyers and market rates for Home Again buyers.
• Home Sweet Home: Provides $12,000 in down payment and closing cost assistance that’s fully forgivable after 10 years of living in the home as your primary residence. Program ends when funding runs out.
• Delaware Diamonds: Provides $10,000 in down payment and closing cost assistance that’s fully forgivable after 10 years of living in the home as your primary residence. The program ends when funding runs out. Available to employees of certain hospitals, public and private schools, and the state, as well as first responders, active military, and veterans.
• First State: Provides 3% of the loan amount for down payment and closing costs. This assistance is a deferred loan that is due when the homeowner sells, refinances, transfers title, or stops using the property as their main residence.
• DSHA Delaware First-Time Homebuyer Tax Credit: Offers a mortgage credit certificate that allows first-time buyers — or repeat buyers in targeted areas — to get a federal tax refund for 35% or $2,000 of their mortgage interest, whichever is less. Income must not exceed certain limits based on household size and county. Must get a mortgage from a participating lender. The tax credit can be used with Home Again loans, but not the Welcome Home program. 

You can’t change the inflation rate, but you may be able to improve your finances. All lenders want to know is, “Will the borrower pay me back?” These tips can help you convince them that the answer is a strong yes:

• Boost your credit score: The most effective way to improve or maintain your credit score is to make all your payments on time. Put all your bills on autopay, and schedule them to be paid before they’re due. Make sure each payment goes through. Use a free service to keep an eye on your score, and try to get it above 760.
• Shop around: Never settle for the first mortgage quote you get. Comparison shopping, according to a study by the Consumer Financial Protection Bureau, could save you big, dropping a 7% annual percentage rate (APR) to 6.5%. That’s a difference of $33 a month for every $100,000 you borrow, or about $117 a month on a $350,000 loan. Don’t limit yourself to large banks: Try local and national credit unions, online lenders, mortgage brokers, and correspondent lenders.
• Make your income more appealing: Lenders love stability and predictability. The longer you’ve been in the same line of work and the more consistent your income — according to your last two tax returns — the better.
• Manage existing debt carefully: Reducing debt can lower your debt-to-income ratio and make you a stronger mortgage candidate. But proceed carefully here. Paying off a high-interest credit card can be good, yet depleting your cash and closing that card could be detrimental.

Compare these popular loan types and their requirements to find the right mortgage for your needs: 
 

Conventional

• Most popular
• 620 minimum credit score
• 3% minimum down payment

Jumbo

• For borrowing more than the conforming loan limit
• The minimum credit score depends on the lender; may be around 680
• 5% down payment

VA

• A special benefit for military service members, veterans, and surviving spouses
• Minimum credit score depends on the lender; no VA minimum
• 0% down payment

USDA

• Helps rural buyers with low to moderate incomes
• No minimum credit score
• 0% down payment

FHA

• Helps borrowers with subprime credit
• 500 minimum credit score with a 10% down payment; 580 minimum credit score with a 3.5% down payment