Housing markets and mortgage terms can vary significantly across the United States. Did you know that a potential homebuyer in one state might be able to get approved for a loan more easily than someone with a similar income and credit score who lives in another? It’s something to consider for homebuyers in the market to buy or refinance, the zip code can make a big difference in their mortgage.
A recent study by LendingTree analyzed data from its users in different states to see how the markets compare. The study looked at several factors in the home buying process, like average annual percentage rates (APRs), loan-to-value ratios, home loan amounts, and down payment averages. It also noted the spread between high and low APRs, to show how shopping around for a mortgage can help a potential buyer save money.
The average interest rate for all 50 states is 4.84 percent, with California, New Jersey, Washington and Massachusetts offering the lowest, bottoming out at 4.74 percent. On the opposite end of the scale, New York, Iowa, and Arkansas offer the highest topping off at 4.96 percent. When it comes to down payments, West Virginia is the lowest, where the average buyer only needs approximately $15,000. However, the same buyer in New York will need almost triple that amount ($43,404) for the average down payment.
Buying a home is a major investment and shopping around for loans can save a lot of money. If you want to narrow down the top 10 states for the lowest average mortgage rates, here are the results in order starting with California at 4.74 percent ending with Idaho at 4.89 percent:
- New Jersey
- South Dakota
To find out which states offer the highest rates and more facts read the full report here.