What determines my rate?

1. What the market is doing.  The market for interest rates moves on a minutely basis and most interest rates rise and fall with the sale of mortgage-backed securities.  The market is open 8-5 on business days.  Because rates constantly change, it’s possible to lock interest rates after you have a signed purchase contract on your home.

2. Your credit score.  Mortgage rate pricing adjusts on 20-point intervals, the higher your credit score, the better the rate you’ll get.  This has the greatest effect on conventional loans.

3. Your down payment.  The greater the percentage your down payment, it’s possible for the rate to decrease, all the way down to a 40% down payment.  This varies by loan product and credit score.

4. Your loan amount.  Different loan programs have different pricing, and are often determined by the amount borrowed.

5. Your lock term.  The longer you “lock” your rate prior to closing, the higher the rate will be.  Most home buyers lock for a 30 day term.

6. The type of property. Whether it’s a single family, condo, or cooperative unit.  Single family properties have slightly better pricing.

7.  First time buyer status. If you’re a first time buyer and under the income cap, the pricing of your interest rate improves, as explained in more detail here