Free Mortgage Interest Rate Quote - If you are currently shopping for a new mortgage to purchase a home, or to refinance your existing home, you can receive a free mortgage interest rate quote by emailing me at dave@gofirstsecurity.com.
But first there are some things you should know about receiving mortgage interest rate quotes!The more information your provide to your mortgage company the more accurate your interest rate quote will be. At the minimum you need to know your middle credit score, monthly income, monthly liabilities (includeing car payments, credit card payments, personal loan payments, etc) and requested loan amount. IF you do not know this information then a rate quote will be meaningless. Rather than shopping for a rate, start your shopping for a trustworthy mortgage agent.
Interest rates change daily and all throughout the day. With this in mind, you should try and obtain all of your mortgage interest rate quotes around the same time, and definitely within the same day. If you receive mortgage quotes at different times of the month or spread out over the course of a couple of months you will most likely receive very different rate quotes among the different lenders due to the rates changing constantly. Spreading your quotes out over time may not provide you with the best interest rates or allow you to compare rates amongst the different lenders very accurately.
Unless I have taken a complete mortgage loan application and know the specifics of your qualifications, the interest rate quote is more general information than a specific quote tailored to your situation. As mentioned, the rate quoted will only be accurate if you decide to move forward and the rate is locked that day. Shopping for a mortgage by getting numerous rate quotes can be quite frustrating. Most borrowers have found that rates vary only slightly from one lender to another. Most have found it is better to pick a mortgage agent to work with based on their professionalism and experience rather than who can shout the lowest rate.
When you get a rate quote, you should also get a Good Faith Estimate (GFE). This disclosure will break down all of the costs associated with the closing of your loan. Sometimes a great rate can come with high fees. In the end, it may be cheaper to go with a higher interest rate with lower fees.
When comparing interest rate quotes from different companies, be sure to compare the same products. Pay attention to loan specifics such as fixed rate or adjustable rate, length of loan term, full doc, stated income, or no doc, prepayment period, rate lock period, etc.
Mortgage Interest Rate - There are several factors that can determine your mortgage interest rate. Each of which can carry a different weight when your interest rate is determined.
Below is a list of mortgage interest rate determining factors:
Combined Loan-to-Value (CLTV) ratio: is the percentage of the total loan amount divided by the value of the property. For example, if you have the first mortgage amount for 80% of the property value and the second mortgage amount for 15% of the property value, your CLTV will be 95%. Borrowers with lower CLTV ratio will find the loans with lower interest rates.
Escrows: The property taxes and home owners insurance can be paid one of two ways. Either you can pay them your self when they are due or you can have your lender collect a monthly payment and your lender will pay them when they are due. If your lender collects a monthly amount this is called an Escrow. If you choose to waive the escrows and pay for the taxes and insurance yourself some lenders will consider this an additional risk and increase your interest rate by about 0.25%
Paying Points upfront can lower your mortgage interest rate. Your Loan Officer should help you determine if paying points will save you money based on your future plans.
Debt to Income Ratio: This is the amount of monthly obligations you owe divided by your gross monthly income. This number is used to determine how capable you are of repaying your potential mortgage.
Past 12 Month Mortgage History: One of the single most important fact when determining one's mortgage interest rate is their mortgage, or rental, history. Many lenders will look back 24 months to see how your housing payment history has been. Some lenders will only look back 12 months and others may look back even further. Obviously, someone who has a a number of late payments or slow payments on their mortgage or rent is going to present a higher risk to a lender than someone who continually pays their housing payments on time.
Loan to Value (LTV): Is the amount of money you owe on your house or the amount you are trying to borrower versus how much your house is worth. When you loan to value is low, it is more favorable to the lender to give you the best rate possible because you have a lot of equity in your house and will be less prone to foreclosure in the lender eyes. When your LTV is high then you will get a higher rate.
Bankruptcy or Foreclosure: If you have experienced either of these events then the amount of time that has passed since the BK or FC will have an affect on your mortgage interest rate. The more recent the BK or FC took place the higher an interest rate you will be offered.
Income Documentation: The way in which you document your income with affect your interest rate. Lower documentation loans will cause a higher rate than that of a traditional full income documented loan.
Asset Verification: Generally, you will qualify for a lower mortgage rate if you can verify that you have liquid
assets to cover 3-6 months of mortgage payments (principle, interest taxes & insurance).
A stated income loan is a great loan for people who are W-2ed or self-employed. There are also programs that allow stated income and stated assets on the same loan. These programs help to preserve a borrower’s credit by getting them the funds that need when they need them.
Down payment: The amount you are willing to put down on the purchase of your home is a large determining factor in the interest rate you will receive. Although 100% financing may be available to you (depending on your credit score), you will have a lower interest rate if you are able to make a down payment of at least 5% of the purchase price.
Credit score: Your credit score will determine whether or not you will fit into conforming loan programs with the lower interest rates or into sub prime or ALT-A programs with higher interest rates.
