Compare Current Mortgage Rates in Maryland

First-time homebuyers need to understand how interest rates impact their mortgage. Even though rates may fluctuate by a percentage point or two, these small changes can add up exponentially over time; that’s why you want to secure the lowest mortgage rate possible.

Maryland first-time homebuyers can explore government resources and private loan incentives to secure the lowest mortgage rate possible.   

Mortgage rates in Maryland are influenced by several factors, some of which are within your control and others that are impacted by larger economic forces. This is why you and your neighbor may have similar, but not identical, interest rates even if you use the same lender.

The personal factors unique to your borrower profile include how much you can afford for a down payment, what your credit score is, and what type of loan you’re eligible for.

Borrowers with higher down payments and credit scores will often receive more favorable rates. That’s why it’s important to find ways to improve your borrower profile before applying for a mortgage loan.

However, even borrowers with a great credit score and high down payment will have their rates influenced by market factors. Lenders base rates on national and local trends like inflation rates, the housing market, buyer demand, and the current rate the Federal Reserve sets for banks to borrow short-term loans.

Rates are always fluctuating, which is why it’s smart to compare the average rates offered by multiple lenders to determine which may offer you the lowest rate available. 

Yes, the Maryland Mortgage Program (MMP) has a range of programs available to help borrowers secure a home. The MMP 1st Time Advantage is specifically designed for first-time homebuyers. It offers these borrowers the lowest 30-year fixed interest rate available for a home loan. 

The MMP 1st Time Advantage program is only for first-time homebuyers, with three exceptions:

1. Veterans: The homebuyer is an honorably discharged veteran who has not used the program before.
2. Buyers who have not recently owned a home: The homebuyer has not owned a home within the last three years.
3. Targeted areas: The homebuyer sold their home before buying a property in a targeted area.

The first-time homebuyer must also meet the standard MMP eligibility requirements:

• 18 years old or older
• Present a valid Social Security number
• Meet a total household income limit as determined by the home’s location and size; household income includes income from all adults 18 or older living in the house
• The home purchased must be occupied by the buyer as a primary residence
• Homebuyer must not own another residential property
• Borrower must have less than 20% of the purchase price in liquid assets

Borrowers who qualify for the MMP 1st Time Advantage Program receive:

• Competitive interest rates 
• $6,000 loan for down payment and closing costs
• 3%, 4%, or 5% loan for down payment assistance in a 0% deferred second lien
• 0% interest, 30-year deferred down payment loan equal to 6% of the first lien if the borrower has an area median income level at or below 50%

Remember, not all applicants will secure an MMP 1st Time Advantage Program loan. Qualified borrowers can’t use the MMP 1st Time Advantage Program in conjunction with the Maryland HomeCredit Program, either. It’s a good idea to talk to other lenders about loans for first-time homebuyers so you can compare benefits and determine which is best for your needs.

It’s easy to feel overwhelmed if you’re trying to find the best mortgage rates. If you’re buying a home in Maryland, researching loan types and improving your eligibility can help you secure the lowest rates available. Follow these tips when you start thinking about buying your first home: 

• Get pre-approved for a loan before making an offer on a house
• Save for a down payment larger than 20% to get a lower interest rate
• Improve your credit score by paying down debt and making timely payments
• Check your credit report and remove any inaccuracies 
• Compare loans from banks, credit unions, and online lenders
• Negotiate with lenders for better terms
• Add a cosigner to the loan to potentially lower your interest rate
• Don’t take out new loans or credit cards when you start your home search

Maryland Mortgage Payment loans range from conventional to government-guaranteed loans, like FHA, USDA, and VA loans. Depending on your situation, one mortgage loan may have better benefits than another. For instance, first-time homebuyers who are veterans may benefit from a VA loan while a first-time buyer with a disability may benefit from a conventional loan with the MMP HomeAbility program.

Conventional loan

• Description: A non-government-backed loan offered by a credit union, bank, or other private lender.
• Requirements: Minimum down payment and credit score set by the lender; typically they require a down payment of 3% or more and a credit score of 620 or higher.
• Terms: Varies.
• Pros: Down payment requirement as low as 3%.
• Cons: Might be harder to qualify for; private mortgage insurance is usually required with less than 20% down.

Jumbo loan

• Description: Designed for loans in certain counties that exceed $766,550.
• Requirements: The loan must be above the conventional limit and below the government-defined maximum limit.
• Terms: Varies.
• Pros: Allows borrowers to secure a higher-than-normal loan.
• Cons: Likely requires a higher down payment and good credit score to qualify.

USDA loan

• Description: Designed for low- and very-low-income borrowers purchasing a home in a designated rural area.
• Requirements: Borrowers must use the home as a primary residence, be unable to secure a loan from a lender, and be without sufficient housing.
• Terms: Up to 33 years for most and 38 years for borrowers in certain cases.
• Pros: No down payment required.
• Cons: Must meet adjusted minimum income level in the property’s area.

FHA loan

• Description: A private loan insured by the Federal Housing Administration.
• Requirements: The lender must be approved by the U.S. Department of Housing and Urban Development and the borrower must meet lender requirements.
• Terms: 30 years maximum.
• Pros: Low credit score requirement, down payment requirement, and closing cost amount.
• Cons: This may include additional government fees and mortgage insurance.

VA loan

• Description: A private loan that has a portion guaranteed by the U.S. Department of Veterans Affairs.
• Requirements: Only available to service members, veterans, and eligible surviving spouses.
• Terms: Varies.
• Pros: Lenders may offer better terms than conventional loans.
• Cons: Limited to service members, veterans, and surviving spouses.

The Maryland Mortgage Program also offers what it refers to as “specialty loans:”

• Montgomery Homeownership Program: This is a second mortgage for down payment and closing cost assistance with a 0% interest rate for homes in Montgomery County.
• Montgomery Employee Down Payment Assistance Loan (MEDPAL): MEDPAL is designed for Montgomery County employees who are purchasing a home in the county. This second loan has a 0% interest rate and helps pay for closing costs and a down payment.
• HomeAbility: This loan offers two liens with low or no interest to qualified homebuyers with disabilities. The first lien can be used to finance the home purchase, and the second lien can be used to help cover down payment and closing costs.
• Maryland SmartBuy 3.0: This loan is designed for first-time buyers with student loan debt; it offers financing up to 15% of the home’s purchase price to pay off outstanding student debt.
• Greenbelt Home Advantage: This grant of $15,000 provides down payment and closing cost assistance for first-time homebuyers in the City of Greenbelt. You must currently be renting in Greenbelt to qualify.