Of the numerous factors that influence the interest rate on your mortgage, there are some that you can't modify or change at the last minute. Here are examples of such factors:
There are several ways in which your job affects your mortgage rates. For example, your job determines your earnings and also affects your income-to-debt rate. Also, the stability of your job (determined by your industry and how long you have been on the job) also determine the level of risk you present to the lender. Unfortunately, you can't change your job at the snap of the fingers to qualify for a cheap rate.
Your Credit Score
This is one of the most well-known factors that determine mortgage rates. Your credit score reveals how good you are at meeting financial obligations, and your lender uses the information to determine your risk level. Unfortunately, it takes time to build a strong credit score; this is not something you can change once you are in the lender's office.
The Home Use
The type of home you want to buy also determines your mortgage rates. As a rule, lenders place high mortgage rates on rentals and commercial properties as compared to primary residences. That is, if you are buying a home to live in you will typically pay lower rates than if you were buying the same home to rent it out or use as an office. Would it make sense to change your target property from a primary residence to a rental property just to attract lower rates? For most people, the answer is a clear no.
The economy affects the whole financial industry, including mortgage rates. Rates typically rise as the economy improves and falls as the economy tanks. As an individual borrower, there is nothing you can do to change the economy even if you tried.
The Location of the Target Home
Lastly, it may also be difficult to change your home's location to enjoy favorable mortgage rates – even though you can. Mortgage rates generally vary by state, but it can also vary within the same state. For example, an urban neighborhood may attract different rates from a rural neighborhood even if they are in the same state. Still, it is usually impractical (at least for most people) to move from one state to another or even from one city to another to enjoy low rates.
Fortunately, there are other rate-determinant factors that you can modify even at the last minute. This includes things like the loan term, the type of rate (variable or fixed), and the down payment, among other things. Don't forget that different lenders have different rates so shopping around may help you land great rates too.
Contact a company like Mortgage Edge for more information and assistance.
Hello, my name is Ivan Cruthers. After obtaining my first job after graduating college, I had to take the bus to work every day. I ended up showing up way too early or several minutes late due to traffic and bus schedule discrepancies. I felt like my job was in jeopardy, so I frantically looked for a way to buy a vehicle. I finally ended up talking to the loan officer at my bank about financing options available to me. The auto loan application only took a few minutes to fill out and process. By the end of the visit, I was authorized to buy a fairly nice car from a local lot. I would like to talk about auto loan options in detail to help others obtain financing. I will also explore the application process on this site. Thanks for visiting.