The Truth about Rates

There are many factors that go into the pricing of the interest rate on your mortgage.
It’s important to realize this because the rates that you see on the Internet or in the newspaper may not be the rates that you will ultimately be quoted.

Here’s a general overview of what’s covered when determining the interest rate quote. 

Loan amount: Loans more than the conforming loan limit of $417,000.

Credit score: Your credit score is a major factor in pricing adjustments.  Based on your credit risk and the loan to value, the adjustments can vary. 

Property type: Condos and multi-unit structures have pricing adjustment.

Waive escrows: If you don’t have a monthly impound account for taxes and insurance, the pricing rises by 0.25 percent.

Cash out: If you are refinancing a property, and pulling cash out of the transaction at the close of escrow.

Subordinate financing: If you are going to have a second mortgage on the property, that is subordinated to (behind) the new first mortgage you are obtaining, there is a price increase.

Rate locks: The base pricing allows 30 days to get your loan closed.
On the other hand, if you need 45 to 60 days to close from the date the loan is locked, the rate will be higher by .125 percent to .375 percent.

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