Ask the Expert: Why are there so many advertised mortgage rates?

I have to get a mortgage. I see lots of different rates, and I hear rates are going up. But how can mortgage rates be so different?

You have to look at it this way: A company is about to loan you a whole bunch of money that you will have to pay on for a long time. If you do pay off the loan, everyone is happy; the lender made money and you have your home.

But when a mortgage company looks at your application, it takes into consideration the kind of risk you will be. The higher the risk, the higher the mortgage rate. A high risk person might be one with a lower credit score, for example, or a scarce credit history.

Some lenders are big and some a small. A smaller lender might offer a slightly higher rate because they think being in your town and offering great customer service is enough to justify a point higher. But the opposite could be true, too. A small lender might offer a low rate.

Mainly the lowest interest rates advertised on the internet are perfect case scenarios: You will get the lowest interest rate if your credit score is high; the property is the best type; debt-to-income ratio is low; purchase or refinance; and downpayment.

Most people don’t actually get the barebones interest rates. But most people do get good interest rates in the range of acceptable. Interest rates can change day-to-day, so it is difficult to say what the best interest rate is right now But Kiplinger’s Personal Finances predicts that the 30-year fixed mortgage rate will rise to 4.6 percent this year with the 15-year fixed rate at 3.8 percent.

In this market of rising interest rates, if you are going to buy, it’s time.