Home interest rates vary from borrower to borrower. Even with the same types of mortgage loans, what rate one person qualifies for does not mean that is what rate another person will qualify for. Home interest rates are based on a variety of different factors. Here are a few of the more important factors that help determine what home interest rate you qualify for:
* LTV (Loan to Value) - the amount your home is worth compared to the amount you are borrowing
* Your credit score - generally the higher your score, the better your rate
* Loan type - Fixed, adjustable, interest only, Pay Option ARM, etc...
* Income documentation types - full income verification, stated income documentation, no ratio, no doc, etc...
* Property type - owner occupied, primary residence, 2nd home, vacation home, rental property
* Loan Purpose - purchase, refinance, cash-out refinance, rate/term refinance, debt-consolidation refinance, etc...
When shopping for home interest rate quotes do your best to shop around between different lenders on the same day. Rates change constantly and can change from one minute to the next and throughout the course of each day. If you shop for home interest rates at different times and on different days, you may not find the best home interest rate available because you were not comparing "apples to apples."
Contact a mortgage professional to ensure you receive a low home interest rate based on your circumstances.
The home loan interest rate you pay may not be the full amount of interest due on your mortgage. If you are in a 1%, 2% or other low payment mortgage, you are generally deferring interest.
Your interest rate is influenced by simple things you may not have thought of. Whether your are financing your primary residence or a vacation or investment property affects your rate. Also, whether you choose to pay your property taxes as part of your mortgage payment or pay them separately influences your interest rate.
You home mortgage interest rate is the fee paid on borrowed money. The lender receives a compensation for foregoing other uses of their funds, including (for example) deferring their own consumption. The original amount lent is called the "principal," and the percentage of the principal which is paid/payable over a period of time is the "interest rate."
Home interest rates today are still relatively low compared to other periods of time in the US. This has made homeownership affordable for more borrowers than ever.
When you receive a home interest rate quote, be sure to ask about the cost associated with the rate. Some loan officers will quote you a low rate without mentioning the number of points or high fees necessary to get that rate. They know that most people will tend to go with the lowest rate. However, paying points and high fees in order to get a lower rate is not always beneficial. There is a break even point that should be considered. If you pay $8000 in points and fees to receive a lower rate, and you save an additional $100 a month in interest, it would take you over six years to reach your "break even" point and before you start to realize a true savings. Offering a home interest rate quote with an extra-low rate, without mentioning the number of points and explaining the true costs, is a deceptive tactic used by some loan officers. Choosing to work with an honest and up-front mortgage professional will ensure that you receive a competitive rate and a loan that is right for you.