what determines your mortgage rate

You are looking for the lowest possible rate, but you aren’t quite sure how your rate is determined. Well, there are quite a few factors that get worked into the final determination, but there are three major ones that every home-buyer needs to know about.

MBS: What *really* determines your mortgage rate If you sell your bond for just $800, the buyer gets that same $50 a year in interest. But, having paid just $800, he will get more interest income.

You’ll likely see APR any time you’re looking at mortgage rates. APR stands for Annual Percentage Rate, and it’s the interest rate that’s applied to your monthly mortgage payment, plus additional fees. Say your monthly house payment has an interest rate of 4.75 percent, but your loan’s APR is 5 percent.

Mortgage Interest Rates: How To Shop Lenders and Win! You are here: Home / Calculator / Mortgage Calculator. Mortgage Calculator. Determine the monthly payments for any fixed-rate loan. Just enter the amount and.

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 · There are seven things that lenders consider when determining mortgage interest rates. Any change to one of these things can directly impact the specific interest rate you’ll qualify for. Credit Score. Your credit score has one of the biggest impacts on your mortgage rate as it’s a measure of how likely you’ll repay the loan on time.

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How Your Mortgage Rate is Determined. "That way the bank has more equity in the house and less risk if they have to foreclose on you." In addition to a borrower’s credit profile, the length of the loan also directly impacts the mortgage rate. According to Allert, shorter term loans, say 15 or 20 years, will have a lower interest rate than a 30-year mortgage.

Compare both fixed- and adjustable-rate mortgages (arms). The length of the loan, the interest rate and the type of loan all factor into your monthly payment. scoop: While ARMs can cost less at the beginning, they may end up costing you more than a fixed-rate mortgage over time.

Mortgage Loan Program Is Another Factor On What determines mortgage rates The longer your mortgage term is, the higher your mortgage rates will be. A 15 year fixed rate mortgage will have a lower mortgage rate than a 30 year fixed rate mortgage loan term.

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