How Mortgage Rates Work
Whether your looking to purchase your first home, a repeat buyer, or someone looking to take advantage of better loan terms through a refinance its important to understand how mortgage rates are determined for your unique situation.
Everyday we speak with clients looking for answers about rates so we know how confusing and intimating it can be. That’s why we make it easy for you to find the best rates… Our goal is to be 100% transparent so, once you have all the facts, you can make an informed decision on the best loan product, rate, and terms for your personal situation.
Buying or refinancing a home takes time, patience, and, traditionally, a lot of paperwork. We’ve dismantled the old mortgage infrastructure and replaced it with innovative technology and far fewer hurdles. A focus on your unique situation coupled with our ability to find you the best deal, you end up saving money and spending less out of pocket on your mortgage.
Our process is to provide you with ALL the options you are eligible for, and our promise is to find you a low rate, and ultimately the best deal.
What Factors Affect Mortgage Rates?
Conventional and government lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded, all day long, in real time. Because of the effects of the political and economical events, mortgage rates and fees move throughout the day. Mortgage rates and pricing goes down when MBS pricing goes up, and vice versa. Some of these factors you can control and others you can’t, which is a big reason why rates change daily.
- Economy – The global economy drives all interest rates, including mortgage rates
- Income – Your debt-to-income ratio can affect your rate
- Property location – Different state laws can change lender costs.
- Home use – Primary or secondary residence, vacation home, or rental?
- Property type – Single or multi-family, condo, mobile, etc.
- Loan-to-value – Borrowing less (and putting more down) can get you a better rate
- Credit score – Better credit means a better interest rate. Lower credit can mean a higher rate
- Loan features – Term (30, 20, or 15), documentation type, adjustable-rate, etc.
- Points – Paying extra upfront for “discount points” lowers your rate
- Loan amount – Very high or very low loan amounts can mean higher rates