Carmen Cotto-Rivera
Real Estate Broker Salesperson

"Love Where You Live, and Live Where You Love"

Vylla Home 
office: 856-206-0413

Cell:  201-835-5650

NOW LICENSED IN PA!!!!

CARMEN COTTO-RIVERA

ESPAÑOL   

   "Love Where You Live, and Live Where You Love"

Vylla Home - office: 856-206-0413

cell:  201-835-5650

Paragraph

NOW LICENSED IN PA!!!!

Real Estate Broker Salesperson

The Lowdown on Loans – What Determines Your Mortgage Rate?

The Lowdown on Loans – What Determines Your Mortgage Rate?

Understanding mortgage loans and interest rates can be confusing and frustrating for many homebuyers. It doesn’t help that most advertised rates are just a marketing ploy to lure you in!

In fact, a lender looks at several factors to determine an interest rate based on YOUR specific financial situation, including your credit score, your down-payment amount, your loan amount, and even the type of home you purchase.

The bottom line is — Every loan scenario is unique, which means you might get a different interest rate than the person next to you (and the one you saw advertised).

No One-Size-Fits-All Interest Rate

Here are 4 important points to be aware of before you go shopping for a loan:

  • Rates vary depending on the market and several borrower-specific factors. That’s what makes it complicated.
  • There are tons of different banks, credit unions and lenders that offer entirely different types of loans and corresponding interest rates.
  • The rates you see advertised are usually meant for someone with excellent credit, applying for an owner-occupied single-family home loan, with a big down-payment.
  • Your scenario is unique, so it’s good to know about all the factors lenders are interested in when you apply for a loan.

Loan Purpose

The two purposes for a mortgage loan:

  • A purchase money mortgage applies to the purchase of a principal residence, second home or investment property.
  • A refinancing loan is when you want to obtain new financing for an existing loan. You will probably get a lower rate for a purchase money mortgage than a refinance.

Loan Amount

Your rate will be different depending on the size of your mortgage. You will likely get a lower interest rate when your loan amount is under $453,100 and an even higher rate if your loan amount is over $766,550.

When you hear things like conforming loan limits and jumbo loan limits, these are the loan amounts for the NJ and PA they are talking about, and these different amounts affect your interest rate.

Credit Score

This one is pretty simple: the higher your credit score, the lower your rate.

This is the single most important factor in determining your mortgage rate. But, your score isn’t the only thing that matters; what it says on your credit report matters too!

Loan-to-Value Ratio

The loan-to-value ratio is the loan amount as a percentage of the total appraised value of the property. The higher the loan-to-value percentage, the higher your mortgage rate will be.

Property Type

If you’re purchasing a single-family residence, the mortgage fees will be slightly lower than if you were to purchase a condo. This is because a condo is part of a larger complex, so if other owners in the complex miss a payment or there are vacant condos, your condo will lose value. Interest rates will be even higher for a co-op.

Occupancy Type

There are three types of occupancy: owner-occupied, second home or investment property.

A second home will have slightly higher mortgage rates and an investment property may be even higher. This is simply because there’s less of a chance that a homeowner will walk away and miss payments on their own residence.

Debt-to-Income Ratio

This is how a bank determines how much home you can afford.

It is your monthly liabilities divided by your monthly income. This gives them a percentage, and the lower the percentage, the lower your mortgage rate.

First Steps to Take

This is all about risk. Lenders base the interest rate they give you on how much risk they’re undertaking by loaning to you. That’s why I will always give you as much information as possible about the process and how to prepare your finances.

I recommend you shop around for your mortgage rate! Again, different lenders will offer different loans and rates, so the more you know, the better your rate will be.  I have great lenders I can connect you with that have low rates.

All of this can feel overwhelming and complicated, but dont worry – youre not alone!

No matter what your loan scenario is, I know all about mortgage rates and the lending process. Im here to answer all your questions and lead you step-by-step to your best deal.

What You Need To Know Before Buying Your First Home!

Hi, there!

I'm Carmen and I love helping first time home buyers, including Spanish speakers,  buyer their first home.  I also love helping sellers looking to move up or downsize to their next home.  Let me know how I can help you make your real estate goals come true. 

Let's Meet

Contact

201-835-5650

921 Pleasant Valley Av
Suite 200
Mt. Laurel, NJ  08054

ccr@ccrsellsrealestate.com

Buyers:  tips and advice on buying your first home

My Listings (and their stories)

Sellers: tips on home maintenance and prepping your home for sale 

Blog

schedule your free consultation

Hi, there!

I'm Carmen and I love helping first time home buyers make their first home more affordable and I love helping sellers looking to move up to their forever home. Let me know how I can help you make your real estate dreams come true. 

schedule your free consultation

Buyers:  tips and advice on buying your first home.

My Listings (and their stories)

Sellers: tips on home maintenance and prepping your home for sale 

Blog