What determines the interest rate for your individual loan? There are many different factors within the loan process that will determine your interest rate. The information below will briefly explain some of these factors.

  • Loan to value Your loan to value is simply known as (LTV). Your (LTV) is determined by the appraised value of the home and the amount borrowed against the home. Example- Home value of $200,000.00 and you are obtaining a $180,000.00 mortgage. Your (LTV) would be 90% leaving a 10% equity position in the home. Typically the lower your (LTV) the better your interest rate will be.

  • Fico Score Your fico score is better known as your credit score. This is determined by pulling your credit from all three credit bureaus. After obtaining all three credit scores the lender will use the middle score to determine if there is are needed adjustments to your interest rate. Example- Trans union credit score- 661, Equifax credit score 649, Experian credit score- 676. This would then make your credit score a 676. Typically the higher your fico score the better your interest rate will be. You can obtain more information on your credit score by going to the credit info tab of our website. This will give you information on how to improve your credit score or fix problems with your past credit history.

  • Bankruptcy Also known as (BK). If you have had a (BK) with in the past seven years you will need to disclose this information. You will need to have a copy of your (BK) papers. Depending on what type of (BK) was filed will determine if you are eligible for a mortgage. The type of bankruptcy is very important in the mortgage process. If a chapter 7 (BK) was filed the lender will go off of the date the (BK) was discharged. If a Chapter 13 (BK) was filed and discharged. They will use the filing date of the (BK), however they may ask for a payment schedule to confirm the (BK) was paid as agreed. When a (BK) has been filed, this will typically increase your

  • Foreclosure If there has been a foreclosure with in the past seven years this information will need to be disclosed. The circumstances of the foreclosure and how it was satisfied will also need to be known. This will typically increase an interest rate in the loan process.

  • Property type Different property types are associated with different layers of risk. Investment, Condominiums, Multifamily these types of properties will usually have an increase in interest rate. These types of properties should be discussed in depth with your mortgage officer when obtaining a mortgage. Obtaining a mortgage for these types of properties is usually more difficult.

The above descriptions and examples are very brief. You will need to speak with one of mortgage officers to discuss you specific questions and situation.

Interest Rate Questions?

Do you have a question about interest rates? Submit your question(s) below and a Mortgage Specialist will contact you shortly. Please be as detailed as possible, so we may answer you question(s) accurately.

Requested Information.