Factors That Determine Mortgage Rates

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Essential Factors That Determine
Mortgage Rates





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Introduction

• Interest is typically a dollar amount that a
  lender receives based on the amount lent. This
  compensates for the lenders risk.
• Mortgage rates are no different. They benefit
  your mortgage lender by bearing the loans risk
  for the specified term.
• Most of us who apply for a loan prefer a loan
  program that has a lower interest rate. However,
  there are various factors that influence mortgage
  rates on the market.

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• 6 factors to understand to help you lower your
  interest rate.
• 1. Credit Score
• The credit score helps define the financial
  reliability of an individual.
• A higher credit score usually correlates to a
  lower interest rate.
• 2. Home Price And Loan Amount
• The home price and loan amount determine the
  interest rate.
• A higher home loan will usually involve a higher
  interest rate.
• A low home loan amount will have a comparatively
  lower interest rate, due to low financial risk on
  the part of the lender.

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• 3. Down Payment
• A higher down payment results in a lower interest
  rate.
• A lower down payment results in a higher interest
  rate.
• This is because a higher down payment means less
  risk for the lender.
• The key to managing a loan properly is by
  providing enough funds up-front.
• 4. Loan Term
• Loan term influences interest rates
• A higher term implies a higher risk to the
  lender.
• A loan term with lower tenure will have a lower
  interest rate. Although, your monthly payments
  will still be higher than a loan program with
  higher tenure.

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• 5. Interest Rate Type
• Interest rates are of two types
• a) Fixed Interest Rate A Fixed Interest Rate
  doesn't fluctuate. It stays the same over the
  life of a loan.
• b) Variable Interest Rate A Variable Interest
  Rate fluctuates based on market conditions.
• 6. Loan Type
• Different loan types have different interest
  rates, depending on the benefits and
  restrictions.

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• Are you looking to refinance your loan to a lower
  interest rate or reduced term? Drew Mortgage
  Associates Inc. is a mortgage company in MA that
  can help provide mortgage loans or refinance your
  loan to a lower interest rate or reduced term.
  Our experienced mortgage loan professionals will
  guide you while filling out the application and
  help you find the right loan program that best
  works for you.
• Read here about Which Factors Determine
  Mortgage Rates?

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DREW MORTGAGE BRANCH OFFICES
Drew Mortgage Associates 196 Boston Turnpike
Road Shrewsbury, MA 01545 Phone
508-753-1656 Website https//www.drewmortgage.com
/
Peabody Mortgage Lenders 1 Mt Pleasant
Drive Peabody, MA 01960 Phone [phone]
Boston Mortgage Lenders 232 Commercial St Boston,
MA 02109 Phone [phone]
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