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What Determines My Interest Rate?

I often get asked 'well, my credit score is 760, why isn't my rate lower, my friend bought a house last month and his rate was lower'?

This is a great question. There's a lot of misconceptions on how one's interest rate is determined. As it happens credit score is only one of three factors that go into generating a rate. Three people, all with the same credit score, could end up with a different interest rate depending on the details of the other two factors. Here's a quick breakdown of how it works:

  • Credit Score
    Of course your score plays a big part in your interest rate determination. The higher your score, the better your interest rate is. Loan programs generally allow scores down to 600, but to get the best rate having a score over 680 is ideal.
  • Down Payment
    The larger your down payment, the lower your interest rate. Put down only the minimum required by the loan program you're using, and you'll see a higher rate because of it.
  • Loan Program
    There's a couple of unique programs out there but the main ones are Conventional, VA, FHA and USDA. Which program you're using plays a part in your rate as well. VA loans have the lowest rates out of all the loan programs out there.

Basically, what it comes down to is risk layers. High scores and large down payment means you're a low risk for default - so you'll see a better interest rate.

To ensure you're getting the best rate possible it's good to chat with a mortgage professional before you are ready to move on a mortgage. With just a quick consultation your credit can be reviewed, and we can tell you what steps you might take to raise your score. Allowable down payment sources can also be discussed. If you do a little preparation upfront you're guaranteed to get the best interest rate available when it's time for your new mortgage!

As always consultations are free and better yet if you move forward and close a loan with us you'll receive a $500 credit at closing to be applied to your closing costs!

Contact Wendy 7 days a week for more information:

Phone or Text: 321-504-1175
Email: wendy@aloaninthesun.com
Facebook Messenger: @aloaninthesun

Why You Should Call Us First

  • Detailed loan status updates save you the time and hassle of trying to find out what's going on with your loan file.
  • Quick and efficient problem resolution system. Our workflow is designed not only for speed and efficiency but to also catch any potential problems. We don't bury our heads in the sand in the 11th hour.., we work diligently to identify any potential problems up front and work directly with you to resolve them.
  • Experienced processing staff pre-underwrites loan files before submission to our investors. Detailed review ensures that the majority of our loan files are put into final approval status at the first submission.
  • We're local and accessible when you need us. When you're working, we're working even if it's after hours or the weekend.


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