Interest Rates are now below 3% so how do you take advantage if you are looking to refinance or purchase a new home? What factors go into determining the interest rate that you are quoted? In today’s video “How do you get the best interest rate – New Housing Market 2020 Update” I go over the factors that your mortgage professional uses to determine your interest rate, explain the difference in interest rate vs apr and also give you some things you should be doing if you are considering refinancing in the near future.
How do you get the best interest rate? There are several factors that go into determining your interest rate. While each of these is a factor, they all build on one another. What I mean, is just because you have a good credit score doesn’t mean you get the best interest rate, the other factors are just as important
1. Credit Score
2. Loan to Value (LTV) – What you owe versus what the home is worth
3. Loan Type – Conventional, FHA, VA, USDA, etc…
4. Loan Purpose – Purchase, rate term refinance, cash out refi
5. Attached vs Detached
6. Occupancy Type – Owner Occupied vs Investment vs Second Home
7. Loan Amount – Conforming vs High Balance vs Jumbo
All of these factors determine your interest rate in addition to how your mortgage broker gets paid. If they build their commission into the interest rate, that may also mean you get a higher interest rate versus paying any origination points to get a lower interest rate
Interest Rate vs APR – Interest Rate is how your monthly payment is calculated where APR is the fees associated with the cost of your loan amortized over the life of the loan.
I hope this mortgage update provides you with insight on interest rates, apr and what you should be doing if you are considering doing a cash out refinance, refinancing rate term or purchasing a new home.
Please let me know your thoughts below: what are your predictions for the housing market 2020 forecast and the housing market 2020 california? Do you believe interest rates will head lower? I’d also love to know if you believe there is a real estate bubble or a housing market crash 2020 coming?
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