Your mortgage’s interest rate might seem like a black box–you know what comes out of it (your interest rate) but what happens to even get that number?
When deciding your mortgage rate, your lender will look at 4 key things. First, they’ll look at your credit score and your down payment. The better your credit score and the more you have to put down, the lower your interest rate will be.
This is why it’s super important to save for your down payment and focus on building your credit score before buying.
Your mortgage rate will also depend on the type of loan you get and the term of your loan. Some loan types, like the VA or USDA loan, have low interest rates as a feature of the loan. A shorter loan term will also lower your rate.
These 4 factors play a large role in determining your mortgage rate. Have any questions? Drop them below in the comments or send me a DM!