One of the most common questions I get: What is the interest rate right now?
Other versions of it are quite similar.
But what goes into the rate that a borrower would get? Turns out, the answer is NOT a simple one.
This video discusses the various different criteria that influence an interest rate and uses two real-life scenarios to demonstrate a comparison.
Not only do interest rates move every day, every lender has their own agenda for that day's environment. On top of that, there are 8 different categories that can adjust the rate on any particular mortgage.
They are as follows:
(1) Occupancy: whether you live in the home as a primary or secondary residence makes a difference, as well as whether it is an investment property.
(2) Purpose: a mortgage to purchase a home will get the lowest rate available, whereas a cash-out refinance will be more expensive.
(3) Equity: the more equity in the home, the lower will be the rate.
(4) Property type: single family homes get lower rates than do condominiums or multi-unit properties.
(5) Loan Amount: very small or very large loan amounts cost more.
(6) Credit scores: this is the least surprising adjustment - the better your credit score, the lower will be your cost to borrow money.
(7) Timeframe: the longer a lender has to lock/commit to a specific rate, the more they will charge for it.
(8) Location: lenders will usually charge more for certain states (Unfortunately, CA is one of those that get hit with an extra charge.
For more information on the systems that I use and the extremely effective strategies I employ for both home buyers and sellers, please contact me.