Friday, November 6, 2015

6 Factors that Influence Your Home Loan Interest Rate

You've heard that interest rates are at historically low levels. However, what exactly is that interest rate going to be when you walk in to apply for a Lake of the Ozarks mortgage loan? It's hard to say an exact rate because the numbers differ based on the person and the situation. Let's take a look at the different factors that will affect your interest rate.

1. Credit Score.

Your credit score is the best indicator how reliable you'll be in paying off your loan. It takes into account your payment history, amounts owed, types and length of credit, and new credit inquiries. Generally, the higher the credit score you have, the better the rate you'll qualify for.

2. Downpayment Amount.

The larger the amount you choose to pay upfront on your home will not only decrease the amount of the loan, but can also help you get a better interest rate. Mortgage lenders at the Lake of the Ozarks see less of a risk when you're more invested in the property.  

3. Property Type.

The type of property you're purchasing, including size and location, will also have an affect on the interest rates you're offered. Lake of the Ozarks homes are often second homes or vacation homes for many people, and therefore, that rate will be different than if the home were going to be your primary residence. 

4. Loan Type and Term.  

Rates can vary depending on the type of loan that you choose, such as Conventional, FHA, VA, USDA, etc. In addition, the term of your loan can also impact the rate. While 30-year mortgages are the most typical, choosing a 15-year mortgage could get you a lower rate. This would also lower your overall costs, but you would be making higher monthly payments.  

5. Home Price and Loan Amount.  

The price of the home minus the amount of your down payment will determine the loan amount or the amount you will need to borrow. Typically, your rate will be higher if you're taking out a particularly small or a particularly high loan.

6. Interest Rate Type. 

There are two basic types of interest rates: fixed and adjustable. Fixed rates never change throughout the life of the loan. Adjustable rates will start at a fixed rate for a period of time and then can increase or decrease depending on the market. You can typically get a better initial rate on adjustable rate mortgages, however, you then risk the chance of it increasing significantly over the life of the loan. 

When it comes to your financing needs, your Lake of the Ozarks mortgage lender is committed to working with you every step of the way. I'll discuss financing options, offer competitive interest rates and back it up with the first class service you deserve. Give me a call at 573-746-7211 for more information on getting in on these low interest rates and applying for a home loan at the Lake of the Ozarks today!

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Sr. Residential Mortgage Lender
NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049

Direct:  (573) 746-7211


**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.


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