SIGN Me up
get weekly emails with tips and info on buying your first place!
VIEW OUR SERVICES
Whether you are a buyer, seller, or investor, we are here to help you!
type below and hit enter
homes you will love
Home owners & sellers
Home Buyers
I'm Monique and I help millennials accomplish their real estate goals! Read more about me
living in the DMV
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:
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. When you hear things like jumbo loans and conforming loan limits, these are the loan amounts for the DC Area they are talking about and these different amounts affect your interest rate. Conforming and jumbo loan limits are set annually by the Fannie Mae.
Credit Score
This one is pretty simple: the higher your credit score, the lower your rate.
This is the single most important factor to 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
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 don’t worry – you’re not alone!
No matter what your loan scenario is, I know all about mortgage rates and the lending process. I’m here to answer all your questions and lead you step-by-step to your best deal.
For tips and updates follow me on Insta @mvb.realestate
I got into real estate after I purchased my first home and felt completely lost. No one should feel that way... Read my full story
© 2023 MVB Residential. RLAH @Properties. 1017 O ST NW Washington DC 20001. 202-518-8781.
all rights reserved. privacy policy. site by sugar studios + Showit
Give it to Me!
Get your FREE Home Buying 101 Guide!