What Goes Into Determining Your Interest Rate?


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There’s only one foolproof way to find out what the best interest rate on your home loan will be. I’ll go over what it is today.

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What goes into determining what your interest rate will be on a mortgage?

The interest rate you get on a home loan is going to depend on a few factors. Anyone who tells you any different is just trying to rope in your business. For example, have you ever seen a car ad that features a brand new Mercedes Benz for only $110 a month only to call and find out it would actually end up costing you around $700? That’s because that $110 price is just a decoy to get you to call and see what you actually qualify for. Interest rates for home loans work the same way.

What you qualify for is always going to depend on your specific financial situation. To find out what your interest rate will be you’ll have to go through the full pre-approval process.

You need to avoid being rate conscious or trying to get the lowest possible rate because it will depend on your full financial portfolio. You may get discouraged if the number you hear isn’t what you thought you would qualify for, but the rate that’s being offered might still be a great deal and be exactly what you need.

We once had a veteran client who purchased a home after we got him an amazing interest rate and monthly payment. He later racked up some credit from doing some renovations to the home. He was worried about refinancing his home because rates had risen since he purchased his home. In fact he was so scared he would lose his perfect interest rate, he wasn’t even looking into refinancing. However, I finally called him and broke down the numbers to show him that even though he would be getting a slightly higher rate, he would still save $1,000 a month if he pulled his equity of the property and put it into another VA loan.

It’s essential you go through the full pre-approval process before making any decisions.


That’s why it’s so important to go through the full pre-approval process. Make sure whoever you are working with breaks down all your options so you can make the best decision for your specific situation.

If you have any questions about mortgage loans please don’t hesitate to give me call or send me an email. I look forward to hearing from you.


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