GOBankingRates Study Uncovers the 10 Cheapest States for Financing a Home

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Aug 05, 2014, 07:15 ET

LOS ANGELES, Aug. 5, 2014 /PRNewswire/ -- The best state to finance a home is Rhode Island, with an average mortgage rate of 3.395%, according to a new study from leading personal finance website GOBankingRates. Conversely, Nebraska is the most expensive state for home financing, offering buyers an average mortgage rate of 4.102%.

CLICK HERE to see where your state ranks for mortgage rates

GOBankingRates Study Uncovers the 10 Cheapest States for Financing a Home (PRNewsFoto/GOBankingRates)

"When it comes to 15- or 30-year mortgages, a 10th of a percentile can make a huge difference in terms of costs over the life of a loan, as well as month over month. And when rates do go up — which they will, sooner or later — home buyers will be looking at hikes of more than just a few basis points," said Christina Lavingia, an editor for GOBankingRates.com.

Additional findings:

Six of the 10 best states for affordable mortgage rates are located in the Northeast, including Massachusetts and Pennsylvania.
Conversely, six of the 10 worst states for mortgage rates are located in the Midwest and Northwest, including Oklahoma and Indiana.
The average mortgage rate in the United States is 3.747%.

To see the 10 cheapest states for financing a home, go to bit.ly/MORTGAGErates.

Regionally, factors like borrower demand, local property values and unemployment play a part in mortgage rate variation. Additionally, closing costs are an often overlooked mortgage rate influence, Matt Shibata, a CFA and portfolio manager, told GOBankingRates.

"Closing costs have lots of regional variations based in state and county laws, fees, and taxes. These closing cost differences are the main drivers of the regional variation people see in mortgage rates, since they impact the APR, which is the format that lenders must quote in," Shibata said.

About GOBankingRates

GOBankingRates.com is a personal finance and consumer banking website that connects consumers with the best credit unions, banks, interest rates and money-saving tips. Its editors are regularly featured on top-tier media outlets, including U.S. News, Business Insider, Huffington Post and more.

Methodology: GOBankingRates surveyed mortgage rates for all 50 states and the District of Columbia using data from RateWatch. The study looked at more than 102,000 15-year fixed, 30-year fixed and five-year adjustable-rate mortgage products to find the weighted average for each state and the District of Columbia.

Contact:

Connie Lundegard
GOBankingRates
[email protected]
310-297-9233x112

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SOURCE GOBankingRates