"What is Your Rate?"....A Popular Question from Home Buyers Today

Mortgage and Lending with Luminate Home Loans, Inc. - NMLS# 150953 NMLS# 274125

“What is your rate?”

As a Mortgage Advisor for almost 15 years, this is the #1 question many of my clients ask when they call to look for mortgage financing. Since the rate affects the monthly payment amount, it’s not surprising that this is a popular question. Failure to get a lower interest rate could cost you thousands of dollars over the life of the loan. But what is difficult to convey is that it isn't as simple as looking at a rate sheet to give "today's rate".  There are up to 28 factors that go into determining what interest rate any one home buyer will receive.

They are:

1.   Loan Size

2.     Loan to Value (LTV)

3.     Combined Loan to Value (CLTV)

4.     Credit Score

5.     Credit History

6.      Escrow Preference

7.      Length of Rate Lock

8.      Loan Type (Conventional, FHA, VA, USDA)

9.      Property Type

10.  Occupancy Type        

11.  Residency

12.  Available Assets

13.  Co-Borrower(s)

14. Asset Seasoning

15.    Debt to Income Ratio (DTI)

16.   Improvements Needed

17.    Employment Type

18.    Employment History

19.    Documentation Type

20.    Interest Only or Amortized Payment

21.    Relocation

22.    Seller Contributions

23.    Gifts

24.    Cash-out (if a refinance transaction)

25.    Lender’s Fees

26.    Lender’s Credit

27.    Loan Term (10 year, 15 year, 30 year)

28.   Discount Points Paid

There are some other facts to note as well:  Interest rates change daily. Mortgage interest rates have nothing to do with Federal Reserve activity. Banks and lenders do not huddle up once a week to decide what to offer. And the government does not dictate that rates be better some months and not so good other months. 

As always, the best option is to call your mortgage loan officer to discuss your specific financial situation to best determine what your rate will be.  It is our goal to always find you the best loan program and interest rate to fit your needs.  


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