Residential Mortgages and Commercial Loans | Mortgage Broker Largo Florida

Mortgage Rates

THE "PUBLISHED" MORTGAGE RATE IS NOT YOUR MORTGAGE RATE

Factors That Determine Your Mortgage Rate

What's my mortgage rate? It is the first question you ask when shopping for a home loan. Banks and brokers know this and publish a low "mortgage rate" and even push the "1-week change" to create a sense of urgency.

They will show the ideal rate—a rate for someone with perfect credit and no other negative factors. The goal is to get you to start an application. You think you are getting a deal. They get a lead. Once you start the application the rate changes, they know you'll probably stick with them even if the rate is a little higher.

Protect yourself, and ask a bank or loan originator if the following factors will affect your "published" rate.

Does My Zip Code Affect My Mortgage Rate?

Trends and conditions in the housing market are one factor that can affect rates, and all housing markets are not equal. Take, for example, Fort Myers, Florida. Fort Myers has one of the fastest-growing populations and economies in the entire united states. Contrast that with Pine Bluff, Arkansas, where there is a city exodus. You can see how the markets may affect rates. Please note, these are examples and not hard and fast rules. Many factors determine interest rates.

How Does My Credit Score Affect My Rate?

This one you probably already knew. The better your credit score, the lower the risk to the lender. Lenders can offer better mortgage rates to people with higher credit scores because they are more likely to pay back the loan. However, depending on the loan type, credit scores are not always a determining factor for determining your rate. Government programs like FHA and VA loans allow borrowers with less than perfect credit to take advantage of lower interest rates. Talk to a mortgage professional to determine what loan type is best for you.

How Does My Loan Type Affect My Mortgage Rate?

You need professional help when it comes to picking the right loan program. Because a professional knows what questions to ask (are you a veteran? first-time homebuyer? down-payment assistance? etc.). A professional can match your risk profile to the best loan type for you. They can also shop your loan to multiple lenders, getting you the best possible rate.

How Does The Size Of My Loan Affect My Rate?

How much you need to borrow and how much you can put down will affect your interest rate and payments. If your down payment is less than 20% of the purchase price, you may be required to purchase private mortgage insurance (PMI). If you are buying luxury property and need to borrow a larger sum of money, you may need a Jumbo loan. All of these factors determine who will lend you money and what interest rate you will pay. To better understand all the factors of determining your interest rate, contact DDA Mortgage.

How Will The Terms Of My Loan Affect My Rate?

30-years, 20-years, 15-years, 5/1 ARMs, 7/1 ARMs, and other loan types and terms affect your rates. In general, the quicker you are willing to pay back the loan, the lower the interest rates, but this is not always the case. Loan types like FHA and VA might offer better rates with longer payback periods. Talk to a professional to determine the best terms and rates for you!