Wondering what interest rate you’ll be offered after you complete your loan application? This guide can help you end up with a lower interest rate by explaining your financial and employment history affects it. Your loan’s rate will be largely determined by:
Your credit score
Credit scores earn lower rates, so be sure to check your credit reports for errors before applying for financing.
Type of property your buying
Expensive homes may require a jumbo loan with a slightly higher rate.
Your down payment
Higher down payments lower your loan amount and our risk.
Your debt to income ratio
Borrowers with higher levels of monthly debt represent a higher risk to lenders, so it’s smart to pay down credit card and personal debt before applying for a mortgage.
The difference between an interest rate and an Annual Percentage Rate (APR)
The consumer Financial Protection Bureau (CFPB) defines and APR as “costs over your loan term expressed as a rate”. An interest rate can be described as the “starting point” of what you'll pay for your home financing as the cost you will pay each year to borrower money. An APR is a broader measure of the cost to you of borrowing money. In general, the APR reflects not only the interest rate, but also any points, mortgage broker fees, and other chargers that you pay to get the loan. For that reason, your APR is usually higher than your interest rate.
Teresa Rutherford with Caliber Home Loans
Team Sales Manager
NMLS #447904
629 Phonenix Dr., Suite 175
VA Beach, VA 23452
Direct: 757-286-6009
Teresa.Rutherford@caliberhomeloans.com
www.caliberhomeloans.com/trutherford
