Compare Current Mortgage Rates in Rhode Island

If you’re a first-time homebuyer in Rhode Island, being aware of how and why mortgage rates fluctuate can help you find the most affordable loan. Interest rates impact the lifetime cost of the loan, which is why it’s so important to comparison shop. The lower your interest rate, the more you’ll save throughout the loan’s term.

The good news is that Rhode Island has both state and federal governmental resources available for first-time homebuyers to help ease the financial burden.

Mortgage rates in Rhode Island are determined by a host of different factors, some of which are within your control, such as your down payment, loan type, and credit score, and some of which are determined by the economy and the market: inflation rates, buyer demand, housing inventory, and the Federal Reserve, to name a few.

By saving for the highest down payment you can comfortably afford, improving your credit score, and taking advantage of first-time homebuyer loans, you can secure a more competitive mortgage rate in the current market.

Yes, Rhode Island has a first-time homebuyer program available through RIHousing. This program is designed for one- to four-family homes and condos in the state and offers up to 100% financing with no down payment requirements. 

Income limits are: 

• $120,934 for a 1- to 2-person household
• $139,074 for a household of 3 or more persons

Purchase price limits are:

• $748,958 for all Mortgage or Mortgage Revenue Bond (MRB) programs, which are tax-exempt housing bonds offered by state and local governments to help low-income first-time homebuyers 
• $736,000 for conventional, non-MRB, and FHA Refinance programs

No matter your income, your loan must also come from an approved lender. RIHousing publishes a list of participating lenders on its website. 

RIHousing’s Extra Assistance program offers either 6% of the purchase price or $15,000 (whichever is lower) to qualified first-time mortgage borrowers. It’s only available on first mortgages made through RIHousing. To qualify, you must:

• Occupy the home as a primary residence
• Have a minimum 620 credit score
• Complete a homebuyer education course
• Obtain a RIHousing mortgage through an approved lender
• Be a first-time homebuyer purchasing a home or condo in Rhode Island

Rhode Island also has two other down payment assistance programs. The FirstGenHomeRI program offers $25,000 in down payment or closing cost assistance to first-generation homebuyers who are also first-time homebuyers. RIHousing’s 15kDPA also provides a 0% interest $15,000 loan for a down payment or closing cost assistance.

Having multiple loan options doesn’t necessarily make choosing a loan type any easier, especially if you qualify for more than one loan. If you’re trying to find the best mortgage rates in Rhode Island, you should improve your eligibility before applying for any mortgage loan. 

Look into the qualification requirements for the loans you’re interested in and consider improving your borrower profile with these tips:

• Pay down any outstanding debts to increase your credit score
• Review your credit report and remove any inaccuracies
• Plan on saving 20% for a down payment
• Visit traditional banks, online lenders, and credit unions to compare loan details
• Discuss options with lenders, and negotiate for lower rates or better terms
• Get pre-approved for a loan to demonstrate your financial security to a seller
• Refrain from making large purchases or opening new lines of credit
• Consider adding a co-signer to secure a larger mortgage or lower interest rate

The Ocean State has first-time homebuyer loans available through RIHousing, but these aren’t the only types of loans you should consider. You may qualify for other types of mortgages in Rhode Island, including standard mortgage loans, jumbo loans, and VA loans. Consider all of these options before applying for your first mortgage. 

Conventional loan

• Traditional, non-government-backed loans available through credit unions, banks, and private lenders
• Down payment and credit score requirements set by each lender
• Terms vary
• Pro: down payment qualifications as low as 3%
• Con: may be harder to qualify for

Jumbo loan

• A loan designed for mortgages in specific counties that exceed $766,550
• Loans must be below the government limit and above the conventional limit
• Terms vary
• Pro: enables homebuyers to secure a loan for an expensive home
• Con: credit score and down payment requirements are higher for most lenders

FHA loan

• Backed by the Federal Housing Administration and insured by the government
• U.S. Department of Housing and Urban Development (HUD) must approve the lender and the borrower must meet lender requirements
• 30-year maximum term
• Pro: low down payments, easy to qualify for, and low closing costs
• Con: additional governmental fees; mortgage insurance required

USDA loan

• Low-income borrowers in designated rural areas may qualify for these loans
• Applicants may qualify if they are unable to secure a loan elsewhere, are without sufficient housing, and agree to live in the home as a primary residence
• Terms: 38 years for very-low-income applicants, 33 years for low-income applicants (or between 50% and 80% of the area median income)
• Pro: as low as a 1% fixed interest rate and no down payment required
• Con: borrower must meet all eligibility requirements, including meeting the adjusted minimum income level in the home’s area

VA loan

• Private loans that the U.S. Department of Veteran Affairs guarantees a portion of
• Designed specifically for service members, veterans, and eligible surviving spouses
• Terms vary
• Pro: typically easier to qualify for than conventional loans
• Con: only service members, veterans, and surviving spouses can qualify