25 Parameters that Determine Your Mortgage Rates.
Every home buyer wants to know is “what is my mortgage rate?” To get the correct rate for each individual’s situation requires many factors. Here is a list of 25 criteria that would influence your mortgage rates.
- Loan Size ~ are you getting a Conforming loan, a Conforming Jumbo loan or a Jumbo loan?
- LTV ~ Loan to Value ratio.
- CLTV ~ Combined Loan to Value ratio when more than one loan is used to purchase property.
- Loan Type ~ 30 year, 20 year, 15 year fixed rate, ARM ~ adjustable rate mortgage, and Balloon mortgage.
- Credit Score ~ Your FICO score will determine if you pay a higher interest rate. Check your FICO score at myfico.com.
- Credit History ~ Having you been paying all your bills on time???
- Available Assets ~ Cash down.
- Asset Seasoning ~ Banks want to see where the money comes from, is it a gift?
- Debt Ratio ~ also known as back-end ratio that includes all debt commitments including car loans, student loans, alimony, minimum credit card payments together with our house payments.
- Housing Ratio ~ Lenders will calculate your monthly housing payments than include principal, interest, taxes and insurance based on your total income before taxes.
- Escrow Preference ~ Let the mortgage company escrow your taxes and insurance payments.
- Closing Date ~ You can lock in a mortgage rate for only a limited time period (usually 90 days or less). Plus the mortgage process has certain laws and time tables they must follow.
- Property Type ~ Primary residence, vacation home, rental property, commercial property, land sale?
- Occupancy Type ~ Primary home, part time occupancy, rental?
- Residency ~ Primary homes owner occupied tend to get the best rates.
- Co-borrowers ~ Do you need a co-borrower to qualify for the loan, if so then they need to provide all their information as well.
- Improvements Needed ~ Does the house have a fully functional kitchen, a leaky roof, broken heat system?
- Employment Type ~ Self-employed vs being an employee.
- Employment History ~ Have you been working at the same type of job for over a year maybe two. If you are self-employed it is two years.
- Documentation Available ~ Everything needs to be documented, savings, taxes, income…
- Recasting Mortgage ~ Will you want to recast your mortgage in the future? Recasting is when the lender will re-amortize the remaining balance of the loan over the remaining term after the borrower puts an additional large principal payment down during the loan life.
- Relocation ~ Are your relocating through your company, will the company pay costs?
- Seller Contributions ~ Are the sellers paying closing costs, etc.?
- Gifts ~ Is part of your down payment a gift? If so then documentation from the giver will be required.
- Cash-out ~ Are you expecting cash out on the mortgage for home improvements, etc.?
This is why it is important that you work with a local experience mortgage broker or banker and know the answers to these questions before you start looking at homes. If you do not know these answers your rate can change.
For more information on Home Trends in Fairfield County, Connecticut contact DMK Real Estate. DMK providing step by step real estate assistance for buyers, sellers, builders, landlords and tenants.
Sellers ~ let DMK walk you through the process of selling your home. As a Sellers Representative Specialist (SRS) DMK has gone the extra step with additional training from the National Association of Realtors® (NAR). As a Realtor® it is important to understand both sides of the transaction to provide the best service and advice to our clients.
Buyers ~ DMK will assist buyers step by step in the process of buying a home. Currently an applicant for the Accredited Buyers Representative (ABR) designation by the National Association of Realtors (NAR) that involves additional education and training to Realtors® who specialize in working with buyers
Builders ~ with over twenty-five years hands on experience and knowledge in residential construction, home improvements and remodeling we can effectively assist builders sell their project in a timely and profitable manner. DMK specializes in energy efficient and green homes and is a designated GREEN Realtor by NAR and an accredited LEED AP Homes by USGBC.
Landlords & Tenants ~ with over twenty years of experience in investment properties and property management DMK understand how important a good relationship is along with finding the right fit makes all the difference. Investors looking for a rental property contact DMK Real Estate for experience, knowledge and property management advice.