Know the Factors That Can Affect Your Mortgage Interest Rate

If you are looking for a low rate mortgage loan in Alameda County CA, you are in the right place. Do you know how the interest rate is determined? Well, this is very tough to figure out for even the savviest of mortgage shoppers. Knowing what factors influence your mortgage interest rate can help you better prepare for the home buying process and negotiating your mortgage loan!

Credit scores:

Before you begin your mortgage shopping adventure, your 1st step should be to verify your credit & reassess your credit reports for errors. Any error on your credit report can lead to a lower score, which can stop you from being eligible for better loan rates & terms.

Fortunately, these days you can even find low rate mortgage loans in Alameda County CA with lower credit scores than in the past. There are many options for lower credit score borrowers that may not be the lowest rate available on the market, but that are still historically very low.

Home type:

The type of home you are financing can also impact your mortgage rate. Generally speaking, a single family residence will qualify for the lowest rate. As you start adding units, you typically have add ons to the rate. Once you go over four units, the loan moves into a whole different category – which again impacts the rates available.

Home price & loan amount:

Homebuyers can pay higher interest rates on loans that are especially large or small. Jumbo loans are products that are available to homeowners who have a larger loan amount than the conventional limit in the area. This is common in Alameda County, where the median home price is much higher than the national average. While this can impact your rate, there are some excellent jumbo loan products available that can still carry historically great low rates.

Down payment:

Generally, a bigger down payment means a lower interest rate, because lenders notice a lower level of risk when you’ve more stake in the property. So if you can put 20 percent or more in down payment, do it – you will generally end up with a lower interest rate as well as avoid paying PMI.

Loan term:

The term, or duration, of your loan is how long you’ve to repay the loan. Generally, shorter term loans have lower interest rates & lower overall costs, but higher monthly payments.

Interest rate type:

Interest rates come in 2 basic types: fixed & adjustable. Fixed interest rates don’t change with time. Adjustable interest rates may have a primary fixed period, after which they go up or down each period according to the market.

Your preliminary interest rate may be on the lower side with an adjustable-rate loan in comparison to with a fixed rate loan, but that rate might amplify drastically afterward.

Call All California Lending to get your Low Rate Mortgage Loans Alameda County CA now! We have an excellent loan product waiting for you!