Mortgage Refinance: What’s Your Rate?
The almighty interest rate is a very important number, and quite possibly the most important consideration for individuals who are searching for a refinance loan .
There are many qualifying factors that ultimately determine the interest rate that you will get for your particular circumstances and resulting mortgage .
Some major qualifying factors are your credit score, percentage of equity interest you will utilize in your home, loan term, and loan type .
Most people are aware that the higher the credit score and the shorter the re-payment term, the lower the rate .
Many people are not aware of how much rates can change depending upon how much available equity you are looking to refinance .
For instance, suppose your home has an appraised value of $100,000.00 and you are looking for a loan of $80,000.00 .
Say that with all other qualifying factors considered, you are quoted a 7.5% interest rate .
You then change your mind and want to finance $100,000.00 and utilize all of the equity in your home .
You are now quoted a 10% interest rate and feel a slight migraine coming on .
Furthermore, you will be required to pay for mortgage insurance if you utilize a conventional bank and finance more than 80% of your home’s appraised value .
This can tack on an additional .5 to over 1% to the effective interest rate of your loan .
Where’s the aspirin! I really hate to do this, but now pretend that you are self-employed and didn’t realize that lenders use your income after tax deductions to determine whether you qualify for a fully documented loan .
Your accountant has done a great job with your deductions, so much in fact that you show a relative low bottom line income figure and do not qualify for a Full Doc loan program .
No problem .
Your credit score is great, which qualifies you for a stated income loan program at a cost .
Just add another one percent or more to your interest rate and you will be well on your way to the closing table .
You are now quoted an 11% rate, which is really a 12% effective rate, and wonder what the heck happened to that 5.99% rate advertised on the website .
Forget the aspirin, just stop the room from spinning!
I apologize for making the room spin, but did so to make a very important point .
Many factors determine a qualifying mortgage refinance interest rate .
Advertisements with appealing rates are great, but you may not actually get the rate shown in the ad .
If you ever request a refinance quote and are given a rate without relaying any substantial information, you may want to consider checking with another source .
Interest rates can be quoted by anyone with a telephone and a rate sheet, but it is advisable to speak with a customer-service focused loan originator .
a good broker or lender will discuss your objectives for the loan, take a full application, search for the best available programs available, and relay the best options available to you .
a seasoned loan officer will be able to meander through scenarios that fit your specific situation, find competitive current-market rates, and stop that room from spinning.
The almighty interest rate is a very important number, and quite possibly the most important consideration for individuals who are searching for a refinance loan .
There are many qualifying factors that ultimately determine the interest rate that you will get for your particular circumstances and resulting mortgage .
Some major qualifying factors are your credit score, percentage of equity interest you will utilize in your home, loan term, and loan type .
Most people are aware that the higher the credit score and the shorter the re-payment term, the lower the rate .
Many people are not aware of how much rates can change depending upon how much available equity you are looking to refinance .
For instance, suppose your home has an appraised value of $100,000.00 and you are looking for a loan of $80,000.00 .
Say that with all other qualifying factors considered, you are quoted a 7.5% interest rate .
You then change your mind and want to finance $100,000.00 and utilize all of the equity in your home .
You are now quoted a 10% interest rate and feel a slight migraine coming on .
Furthermore, you will be required to pay for mortgage insurance if you utilize a conventional bank and finance more than 80% of your home’s appraised value .
This can tack on an additional .5 to over 1% to the effective interest rate of your loan .
Where’s the aspirin! I really hate to do this, but now pretend that you are self-employed and didn’t realize that lenders use your income after tax deductions to determine whether you qualify for a fully documented loan .
Your accountant has done a great job with your deductions, so much in fact that you show a relative low bottom line income figure and do not qualify for a Full Doc loan program .
No problem .
Your credit score is great, which qualifies you for a stated income loan program at a cost .
Just add another one percent or more to your interest rate and you will be well on your way to the closing table .
You are now quoted an 11% rate, which is really a 12% effective rate, and wonder what the heck happened to that 5.99% rate advertised on the website .
Forget the aspirin, just stop the room from spinning!
I apologize for making the room spin, but did so to make a very important point .
Many factors determine a qualifying mortgage refinance interest rate .
Advertisements with appealing rates are great, but you may not actually get the rate shown in the ad .
If you ever request a refinance quote and are given a rate without relaying any substantial information, you may want to consider checking with another source .
Interest rates can be quoted by anyone with a telephone and a rate sheet, but it is advisable to speak with a customer-service focused loan originator .
a good broker or lender will discuss your objectives for the loan, take a full application, search for the best available programs available, and relay the best options available to you .
a seasoned loan officer will be able to meander through scenarios that fit your specific situation, find competitive current-market rates, and stop that room from spinning.
Mortgage Refinance Whats Your Rate
![Mortgage Refinance Whats Your Rate]()
Reviewed by Henda Yesti
on
July 03, 2018
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