Some variables affecting mortgage rates
Lenders consider several items when pricing your interest rate. Here are some of the more important ones:
Credit score. The higher your score, the less risk you pose to a lender, so you’ll receive lower rates. FHA guidelines won’t allow a loan with a credit score below 580. 760 and above gets the best rate.
Down payment. 20% down eliminates private mortgage insurance (PMI).
Property location. This can affect rates. Is the property in an appreciating area or depreciating area? Is it too close to commercial properties? A highway?
Loan amount/closing costs. If you ask a lender to roll your closing costs and other borrowing fees into your loan, your rate may increase.
Loan type. The type of mortgage you choose, Fixed or Adjustable Rate Mortgage (ARM), will have a different rate. Surprisingly, an ARM starts at a lower rate, but in the long term, those rates could increase.
The lender you choose. Different lenders may have different rates, however, not all lenders are created equal. Sometimes the lowest interest rate may not necessarily be the best lender. Get references. Choose wisely.
Premier Mortgage Group Boulder CO