The following factors can affect mortgage rates and fees (collectively, referred to as pricing) of your loan. Answering the often asked question “what is your rate?” is only accurately determined by the following characteristics:
- Transaction type - Purchase, refinance, or refinance with cash out- each of these loan types have diffent pricing
- Loan amount- Larger loan sizes may have higher title fees on purchases. Larger loan amounts, however, may allow for better pricing.
- Credit Score – The higher score, the better your pricing will be
- Loan to Value – The lower the ratio of dollars borrowed to home value, the better the pricing
- Property Type –Single family residences may have better pricing than condominiums.
- Number of units – Single family homes will have better pricing than 2-4 unit properties
- Occupancy- Owner occupied properties will have better pricing than 2nd Homes/ vacation homes. 2nd Homes have better pricing than investment properties.
- Presence of a 2nd mortgage – Homes without a 2nd mortgage will have better pricing than those without a 2nd mortgage. Retaining (subordinating) a 2nd mortgage will have a cost with current lien holder (usually about $200).
- Loan type – Adjustable rate mortgages have lower initial interest rates than fixed rate loans.
- Loan term – Generally speaking, the shorter the term on a fixed rate loan, the better the pricing.
- Points and fees – The higher the fees and points, the lower the rate.
- Length of lock period – The shorter the lock period, the better the pricing.
- Escrowing taxes and insurance – Including your taxes and insurance (escrows) with your monthly payment will allow better pricing than a loan that does not include escrows.
If there is anything I can answer for you, please contact me.
