Your Interest Rate will depend on ten key factors
Your Mortgage Interest Rate will depend on the following 10 factors:
Credit Scores
Credit Scores (FICO)
Higher FICO scores mean less risk to the lender, so they are able to lower the rate.
Down Payment
The Down Payment
The more you put down on your home, the better the interest rate.
Loan Term
The Loan Term
is the number of years you'll have the loan. Most loans are 30 years, but there are options for a 10, 15 and 20 year loan. The shorter the period, the lower the rate.
Loan Type
The Loan Type
Conventional, FHA, USDA, VA and Non-QM are the typical types of loans. The rates vary greatly between them.
Interest Rate Lock Length
Interest Rate Lock Length
You can lock your rate for 7, 14, 21, 30, 45, 60 or even 90 - 120 days. The longer the lock, the higher the rate will be.
Discount Points
Discount Points
Lenders offer the option to "buy down the rate" by paying a certain amount at closing for the lower rate.
Interest Rate Type
Interest Rates Types
There are two basic types: fixed and adjustable. Fixed means it will not ever change. Adjustable rate do change at designated times during the loan and are usually lower than fixed rates.
Home Price
Homes that are priced particularly low or high
We don't often see homes priced too low, but we do see many over the "conforming limits" which can affect the rate.
Home Location
Home Location
If a home is located in a rural area or has more land than usual, the home may be designated differently which can affect the rate.
Home Type
Home Type
Primary residence, 2nd home or investment property all affect the rate.
