Here’s what you can currently expect to pay for a mortgage loan in North Dakota. We update our rates regularly to reflect the most relevant data.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.779% | 6.887% |
| 15-year fixed | 6.583% | 6.837% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Whether you’re buying a home in Fargo or Williston, median real estate prices are higher than you might expect in North Dakota, and homes sell quickly. Mortgage rates change daily and vary depending on your situation. The difference could mean several thousand dollars over the life of your loan.
Benzinga’s here to help you sift through the fine print of mortgages and rates North Dakota home buyers should expect.
Best Mortgage Lenders in North Dakota:
- Best Overall: Quicken Loans®
- Best for Veterans: Veterans United
- Best for First-Time Home Buyers: Bank of America
- Best for Online Lending: Better.com
- Best for Self-Employed Individuals: Flagstar
What is a Mortgage Rate?
Your mortgage rate is the interest you’ll pay on your loan. The interest is paid each month you make a payment toward your mortgage.
Your monthly payment to a lender includes 2 parts — your principal and accrued interest. The principal reduces the amount of money you owe, while interest goes to the lender for servicing your loan.
Your mortgage rate often has 2 rates listed — interest rate and annual percentage rate (APR). The interest rate is the base percentage paid on your loan balance to your lender. The APR is your interest plus additional lender fee charges. Compare both, since APR is typically higher than the interest rate.
5 Best Mortgage Lenders in North Dakota
Here are Benzinga’s best mortgage lenders in North Dakota.
- Online Service
1. Best Overall: Quicken Loans®
Quicken Loans® offers a commitment to providing the best customer experience whether you’re applying for a new loan or need mortgage assistance. It gives you access to online tools that help you track your loan status. The online loan application process is simple and fast, thanks to its intuitive mortgage application tool — Rocket Mortgage® by Quicken Loans®.
The lender offers a host of loan options – FHA, VA, jumbo and conventional loans.
- Current Service Members
2. Best for Veterans: Veterans United
Veterans United is a leading VA loan lender that allows veterans, active service members and eligible family members to buy a home with $0 down payment or private mortgage insurance. You can access a loan with an interest rate that’s 0.5% to 1% lower than standard interest rates. The lender doesn’t impose a prepayment penalty if you pay off your loan at any time.
A 620 FICO credit score is the lender’s cutoff. If you’re not prequalified, you can work for free with its Lighthouse Program to strengthen your credit and finances. USDA, FHA and conventional loan options are also available. A Veterans United loan specialist can help you understand your eligibility and loan paperwork. You’ll also have support to submit your proof of service.
- Broad Range of Mortgage Loans
3. Best for First-Time Home Buyers: Bank of America
Bank of America combines a digital experience with physical locations to provide a loan haven for first-time home buyers. You can complete your loan application online or visit your nearest branch for assistance from an experienced lending specialist. Obtain a no-cost, no-obligation prequalification request in less than 5 minutes.
Bank of America also offers $7,500 in non-repayable credit that you can use to offset all non-recurring closing costs. You can also obtain a fixed-rate loan with a 3% down payment on your home purchase price and up to $10,000 down payment assistance on select locations.
- The Online Experience
4. Best for Online Lending: Better.com
Better.com revolutionized home financing with a digitized process that eliminates fees, commissions, time-wasting appointments and unnecessary steps.
The loan application is 100% online, and preapproval takes as little as 3 minutes. Log in to your online account to lock your interest rate when you are ready. Apply for a conventional or government-backed loan through your smartphone or desktop.
Better.com’s Better Price Guarantee helps you get the most affordable rates. If you obtain a lower mortgage rate from a different lender, Better.com matches it and extends $1,000 credit to cover your closing costs.
- Specialized Loan Products
5. Best for Self-Employed Individuals: Flagstar
Flagstar offers multiple loan solutions to self-employed individuals. You can use your business assets to apply for a loan if you’re having trouble proving your income. You can also qualify for custom loans beyond the conventional 15- and 30-year terms.
The lender’s professional loan package allows recently-graduated professionals to get custom loans that allow flexibility in underwriting. Flagstar also carries a full range of government-backed loans, including USDA, VA and FHA loans. It also provides a mobile application to easily keep track of your loans.
What Factors Impact Your Mortgage Rate?
Knowing how your mortgage rate is determined helps you prepare for negotiating your mortgage and the entire home-buying process. Some of the factors that impact your mortgage rate include:
- Your home location: Mortgage rates vary depending on your state, economy and market conditions.
- Your credit score: Your credit score also affects the interest on your mortgage. Lenders use a FICO score to predict your reliability in repaying your loan. You can secure lower interest rates if you have a higher credit score. A lower credit score may indicate frequently defaulted payments or too much credit. You may be a risky borrower in the eyes of your lender, so you should expect to pay more interest on your loan.
- Your down payment: You’ll pay a lower interest rate if you make a larger down payment. A larger down payment means lenders see you as a lower risk level. A down payment of 20% or more will earn you a lower interest rate, otherwise, you’ll need to buy mortgage insurance.
- Your loan term: This is the period you have to pay off your loan. Shorter-term loans are eligible for lower interest rates and lower overall costs but generally have higher monthly payments.
- Your debt-to-income ratio: Your debt-to-income ratio is a calculation lenders use to determine what share of your monthly income goes to servicing recurring expenses like loan payments or rent. A higher DTI ratio means you have less disposable income each month, which increases your chances of missing monthly payments on your mortgage. Lenders see you as a riskier borrower and increase your APR.
What is a Mortgage Type?
Home buyers have the option to choose between government-insured and non-insured loans. Both mortgage types have their own eligibility and down payment requirements. Here are the mortgage types lenders for first-time buyers offer:
- Conventional loans are the most common type of mortgage loan. Conventional loans don’t have strict regulations on home type, home location and income qualifications. These loans have stricter regulations on your debt-to-income ratio and credit score. You need a minimum FICO score of 620 to qualify and a 3% down payment to buy a home. You won’t buy mortgage insurance if you make a 20% or more down payment.
- FHA loans are issued by private lenders, but the Federal Housing Administration regulates and insures them. You can qualify with a FICO score as low as 580. Down payments are as low as 3.5%. You must obtain mortgage insurance if you qualify for an FHA loan.
- USDA loans are insured by the U.S. Department of Agriculture to help you buy a home in rural areas. You can qualify with a credit score of 640 and $0 down payment on your home purchase. You must meet the location and income eligibility requirements to qualify. You’ll pay an upfront fee and ongoing mortgage insurance premiums to the USDA.
- VA loans are regulated by the Department of Veteran Affairs to help veterans, active service members or surviving spouses buy homes. A VA loan lets you buy a home with $0 down payment as long as you have a 620 FICO score. The VA guarantee replaces mortgage insurance, but an upfront fee is required at closing. You’ll need to submit proof of service with your loan application.
What is a Mortgage Term?
A mortgage term is the duration you have to service your loan. There are multiple mortgage terms available. Each has a different effect on your monthly interest payment, interest rate and the total cost of your loan. Here are the common mortgage terms:
- A 30-year fixed loan has monthly payments spread over 30 years. Your mortgage rate is fixed throughout the lifetime of your loan. You can make additional payments to reduce the loan term, but check with your lender to be sure it doesn’t cost extra to make additional payments.
- A 15-year fixed loan has its monthly payments spread over 15 years. The mortgage rate is fixed, but monthly payments are higher than for a 30-year fixed loan. You will incur lower interest costs over the mortgage lifetime.
- A 5/1 ARM has an interest rate that changes throughout the lifetime of your mortgage. An adjustable-rate mortgage (ARM) usually has 2 numbers. The 1st number indicates the 1st term of your loan, which carries a fixed interest rate. The 2nd number indicates the 2nd term, when your lender adjusts the interest rate. For instance, with a 5/1 ARM, your interest rate is fixed for 5 years. After that, your payment amount and rate both change annually. It could go up or down, depending on market conditions.
Current North Dakota Mortgage Rates
Mortgage interest rates change daily and vary among cities. Rates may even change multiple times in a day. Factors like the demand for housing, bond market, mortgage type and term, down payment and the current state of the economy can influence mortgage interest rates. Lenders also have different rates, which depend on the existing market conditions.
Here’s what you can currently expect to pay for a mortgage loan in North Dakota. We update our rates regularly to reflect the most relevant data.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.779% | 6.887% |
| 15-year fixed | 6.583% | 6.837% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Calculating Interest in North Dakota
Mortgage rates vary from city to city. Here are some current mortgage statistics for several cities in North Dakota.
| City | Average Home Value | Loan Term | Current Rate | Downpayment (20%) | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|---|---|
| Fargo | $225,200 | 30-year fixed | 6.422% | $45,040 | $1,129.51 | $226,463.60 |
| Bismarck | $265,300 | 30-year fixed | 6.422% | $53,060 | $1,330.63 | $266,786.80 |
| Grand Forks | $207,200 | 30-year fixed | 6.422% | $41,440 | $1,039.23 | $208,362.80 |
| Minot | $253,500 | 30-year fixed | 6.422% | $50,700 | $1,271.45 | $254,922.00 |
Lender Credit Score Minimums in North Dakota
Your credit score is based on a scoring model and predicts how reliable you will be as a borrower. Lenders set a minimum score to reduce the risk of defaults. You’ll qualify for a mortgage easily with a higher credit score. You may also enjoy better interest rates. Here are several credit score minimums for North Dakota lenders:
| Lender | Minimum Credit Score Required |
|---|---|
| Quicken Loans® | 620 |
| Better.com | 620 |
| Veterans United | 620 |
| Bank of America | 620 |
| Flagstar | 620 |
Find the Right Mortgage in North Dakota
Just like finding the right property, tracking down the right mortgage takes time.
Start today with some comparison shopping to evaluate your loan and lender options. Use online loan calculators to calculate your monthly payment and expected APR. It’s also wise to look for home buying grants that can cover a few of your closing costs.
Your home and its mortgage are a long-term commitment. The right lender makes all the difference.