How to Estimate Your Mortgage Interest Rate?
With low interest rates, mortgage lending has been on a constant rise. An average layman mortgage seeker will find himself offered multiple rates from different lenders, which would keep him quite confused on which plan to pick. At Toprate Mortgage, we not only ensure you are handed all the available choices in the market, but also help you understand the reasons behind the variations in interest rates. This not only helps you avoid the unsuitable conditional mortgage, but also helps you understand the lender’s view so that you can move forward with picking the appropriate conditions suitable to you.
What Affects Your Mortgage Interest Rate?
Size of the Down Payment
Your down payment highly influences your interest rate. As it is inversely proportional to the lender’s risk, you are certainly offered a lower rate. As 20% of the property value is the minimum requirement for a down payment, you can always save up and offer more to secure a low mortgage rate.
Credit Score of the Borrower
Your previous borrowings and your repayment behavior can easily be accessed by any lender. Any default or delay in payment can be a huge off set for any lender. This is also well reflected in your credit score, which is the main highlight of your mortgage application.
Current and Future Prospective Income with Relation to the Property Value
Your monthly income details have to be submitted along with the application so that the lenders can forecast the probability of you not being able to afford the mortgage repayment. Hence a high stable income for a past few months is a must to maintain. In case of self-employed individuals, a seasonal business is not a big issue unless a good record is not maintained.
Property Yield or Business Plan
In case of Commercial Mortgages, you will be required to submit your purpose of buying the property and future potential yield that may arise from it. This helps you to strengthen your application and increases your chances of approval at a good rate.