People often ask how their interest rate is determined. This rate is actually decided largely by three main factors.
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Lately, a lot of people have been asking about interest rates and how they are determined.
I recently sat down with a special guest, Adam Colberg from Fairway Independent Mortgage Corporation, to help me answer this question.
As a mortgage loan officer, Adam gets this question a lot.
The truth is that three main factors typically determine someone’s interest rate.
- The type of loan program a person wants. Whether a person wants a FHA, VA, or conventional loan will have an influence on the interest rate they qualify for.
- Down payment. The more you put down, the better interest rate you will qualify for.
- Credit score. Because rates are based upon risk, a better credit score will equate to a better interest rate.
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If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
Interest rates are based upon risk.
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