When purchasing a home, it’s important to understand what factors go into determining your mortgage’s interest rate. Familiarizing yourself with the factors that determine you interest rate can help your prepare for the home buying process. Here are 3 factors that can affect your mortgage rate.
Your Credit Score
You should know what your credit score is before shopping around for rates. Knowing where you stand on the credit spectrum will give you an idea of what rates you can qualify for. For example, if you know you’ve got an excellent credit score, you will be more likely to qualify for the lowest rates available with a lender. Check with lenders to see what qualifies as “excellent.” While there are other factors involved, credit score is an significant factor that mortgage lenders use to decide rates and risk factors.
Your employment history
Another important factor in determining your rate is your employment history. You should have a steady employment history last at least two years. You should also not have numerous long periods of unemployment. If you are self employed, be ready to prove your income with documentation.
Your Loan Type
There are many different types of loans to choose from, depending on your financial situation. Some loans have rates that are adjustable, called ARM Loans (adjustable rate mortgages), which others have a fixed rate. Your Lendello Mortgage Consultant can assist you in determining what type of mortgage is right for you.
If you’re interested in applying for a mortgage, be sure to reach out to a Lendello Mortgage Consultant today!