Who Can Qualify For a HARP Loan?from July 8th, 2013
There are many factors that determine how to receive lower interest rates on mortgages. If you are currently in the application process, and you are trying to lock-in a low rate, you must look at some factors that affect interest rates Credit Scores Your median credit score has a tremendous impact on interest rates. Obviously, the higher your credit score, the lower the interest rate you will receive. The opposite is true; if you have a low credit score the interest rate you pay on the loan will be higher. Determine your credit score before the application process by ordering your credit report form the three reporting agencies, TransUnion, Experian and Equifax Debt-to-Income Ratio and Loan-to-Value Ratio If the percentage of your income that goes toward your debt is higher than 38 percent, you can expect to pay a higher interest rate. Determine your percentage by dividing your current debt by your gross income and the figure calculated is the debt-to-income ratio. Also, compare homeowners insurance quotes, the loan-to-value ratio plays a big role in interest rates. Also known as the LTV, this percentage is the loan amount divided by the appraised value of the property, or the sales price. Again, the higher the percentage, the higher the interest rate you will pay. The lower the percentage, the lower the interest you will pay during the life of the loan.