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Delaware is considered to be “The First State” of our country. With a population of about 936,000, the state contains colonial landmarks, historic homes, and stunning beaches. Delaware is situated in the eastern portion of the country next to the Atlantic Ocean. Even though the state is small, it has much to offers residents. If you are looking for a home in Delaware, you can choose from a traditional family home, and Victorian style mansion, or a home in the country. Before you can move into the home of your dreams, you will need to get a mortgage loan. These loans can be complex to understand, so you need to know how they work.

Mortgage Rates in Delaware

The interest rate you will pay on the loan is probably the most important aspect of a mortgage. You want to get the lowest rate available. The lower the interest rate, the less your monthly payments will be, and the less you will pay throughout the life of the loan. The average rate in Delaware for a 30-year fixed mortgage is 4.23%, and for a 15-year mortgage, the rate is 3.37%. You can also obtain a 30-year refinance loan for 4.26% and a 15-year refinance loan for 3.40%. You can get an 5/1 adjustable rate mortgage rate for 3.50%.

Delaware Mortgage Outlook

The overall economy in Delaware is very promising. The median home price is higher than the rest of the country, mainly because it is near the ocean. Delaware boasts one of the lowest foreclosure rates in the country. Wilmington is the most populated city in the state, and it is one of the oldest cities in the nation. The city is home to Wilmington waterfront, which is one of the most sought out places to live in Delaware. The capital city of Dover is another place where houses are in high demand. Dover has a lower cost of living, which makes it attractive to people looking for a new home. The median price of homes in Delaware stands at $213,500, according to Values of homes have risen 2.6% within the last year, and experts say they will rise about 2.7% over the next year.

Delaware Mortgage Laws

All lenders in Delaware are required to be licensed by the state. The state has laws in place to protect you from unfair and dishonest practices. Lenders are not permitted to discriminate against you because of your gender, religion, race, color, or handicap. Lenders are not allowed to keep hidden fees and costs of the loan from you. They must give you a Truth in Lending Disclosure. This document should state the annual percentage rate, amount financed, finance charges, total number of payments, and total sales price of the loan. Lenders must also provide a Good Faith Estimate, which will tell you about all of the fees involved, including the closing cost.

Types of Mortgage Loans

Some of the options available to you include:

  • Fixed rate mortgage: Your rate will not change
  • Adjustable rate mortgage: Your rate will fluctuate
  • FHA loan: A government backed loan that is popular for first time home-buyers.
  • VA loans: A government backed loan available to people in the military or people who are retired from the military.
  • USDA loan: Available to people who have a lower income.
  • Conventional loan: A loan that is not insured by the federal government.

Applying for a Mortgage Loan in Delaware

It is important to get the right lender for you. Search lenders online and compare rates. Make sure you are getting the best rate available. You will get the lowest rate if you have a good credit score. Choose a lender who excels in customer service and will be readily available to answer any questions that you might have. You can go online and get pre-approved for a mortgage, so you will know exactly how much you can spend on your home. The lender will ask you to provide W2 forms, bank statements, pay stubs, and federal income tax documents. An appraisal and inspection will be ordered. When the underwriters formally approve the loan, you can schedule a closing to sign the final documents.