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How Low Can You Go?

 The interest rate you pay on your mortgage depends on a number of factors including:

  • Current market conditions 
  • Your credit score
  • Your down payment amount
  • Your type of mortgage

The bottom line is that the better your financial shape, the better chance you will have of securing the lowest rate in a refinance. To understand your “fiscal fitness,” start by looking at yourself as a lender would and consider your:

  • Credit score: Don’t just look at your score, but the history that goes into calculating it – things like late payments, the length of your credit history and credit inquiries. Where possible, address and correct any issues to help improve your score.
  • Loan-to-Value Ratio (LTV): The LTV is the difference between your requested loan amount and your home’s appraised value. A higher LTV often means a higher interest rate. 
  • Debt-to-Income Ratio: This ratio is a measurement of your overall debt – credit cards, auto loans, etc. – against how much you earn. As with LTV, you want this number to be as low as possible, as a lender will consider it when determining if you can get the best interest rate and, most importantly, a mortgage.

Know Your Options

There are many different ways to reduce your interest rate, including choices of loan types and terms. Contact our loan consultant at (800) 210-8849 to find out which options you may qualify for and how to make them work best for you. 

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