6 Factors That Determin Your Mortgage Rate

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Good morning, the interest rate attached to your home loan will not only affect your monthly mortgage payment, it will also affect the amount of interest you end up paying over the life of the loan. Therefore, it is essential that you do everything you can to get the best rate possible. Here are six factors that can determine the mortgage interest rate you receive.

  • Credit score - This the most important factor. The higher your scores, the less risk you are to the lender. Most lenders consider good scores between 700 to 749, while an excellent credit score is anything over 750. This does not mean you cannot purchase a home with lower credit scores, because you can.
  • Down payment - The larger your down payment, the lower your interest rate should be. Again, less risk. However, a large down payment is not required to purchase a home. You can purchase a home with no down payment or as little as 3.5% down.
  • Property location - Are you buying your home in an urban or rural area? This can affect the interest you get.
  • Loan type - VA, conventional, FHA or USDA, your loan type does affect your interest rate.
  • Loan term - Duration of your loan. Shorter term loans generally get lower interest rate, hence, 15 years vs. 30 years.
  • Interest rate type - Fixed or adjustable? Your initial interest rate may be lower with an adjustable-rate loan, however, it may increase later down the road.

Make sure to speak with your loan officer about all the moving parts that comes with getting the best rate. And don't forget, you do have the option to refinance. Happy house hunting.

If it matters to you, it matters to us. We are always looking out for your best interest. As always, thank you so much for stopping by, and remember, if you are thinking of purchasing your new home, or selling an existing one, please give us a call. We are here to help. We have been helping home buyers and sellers 12 years and counting. Until next time...Diana

Image by: Diana Walton

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Astor & Eaton Realty
Diana Walton
Real Estate Broker
713.208.8013
Write to Diana Walton at homes@astoreaton.com
https://www.har.com/dianawalton

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