If you’re shopping around for a mortgage, you’ll be comparing lender closing costs, fees, and most importantly, mortgage interest rates. Below are the three main factors that will decide how low your interest rate will be:
- Credit score: According to one mortgage broker, ideal borrowers today have a FICO score of 740 or higher to qualify for the best pricing.
- Property types: Buyers of a duplex, four-unit building, or condo may have a rate premium added. Also, lenders will charge borrowers more if they plan to rent out the property and not live there.
- Down payment: Borrowers who put down at least 25 percent will most likely attract the best pricing, lenders say. “Lenders offer different breaks on rates if equity is higher, so you should ask what is available,” according to The New York Times.
