What Your Interest Rate Is Based On

Lenders issue rates to borrowers based on their perceived risk when investing in the property and lending to the borrower.

Several factors are taken into account when determining your interest rate:

• Credit score
• Loan-to-value ratio (what percentage of the property value you are financing)
• Occupancy type (primary home, second home, or investment property)
• Property type (mobile home, condo, single-family residence)
• Loan type (Conventional, VA, FHA, or non-traditional)

These factors help lenders determine the level of risk associated with your loan, which directly impacts the interest rate you are offered.