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A Word About Mortgage Rates |
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What are mortgage interest rates based on?
(The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10 or 30-year Treasury Note. While the 10 or 30-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)
There are many factors that affect your mortgage rate. Some of these factors are:
- Residency-owner occupied, 2nd home or investment property
- Mortgage size-dollar amount
- Documentation Type for mortgage-different types are full, limited and none!
- available assets of the borrower
- relocation to a new area
- credit score
- mortgage loan to value and combined loan to value
- mortgage housing ratio (amount you are spending on the mortgage as a percentage of your income)
- total debt ratio-total amount you are spending on your mortgage plus all your other recurring debt as a percentage of your income)
- property type-single family, condo, duplex, land, new construction
- escrow account desired?
- employment history
- credit history
- how many points do you want to pay (if any)
- closing costs involved
- many more...
These are just some of the factors that go into calculating your rate. Many people are under the mistaken belief that they can just compare rates by calling around. This is simply not true. Many competitive mortgage products look at the "whole picture" to give you the best possible rate. Other considerations you should think about are: how long you plan to stay in the new house? Once you move do you intend to sell it or keep it as investment property? Is there something that would cause you to refinance or sell in the coming years? A mortgage can and should be used as a strategic equity positioning tool and thought of as a part of your entire financial plan.
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Rates Information 
