Federal Reserve Doesn't Control Mortgage Rates
Financial pundits like to talk about what the Federal Reserve is up to. If you have seen recent news stories about “The Fed” raising interest rates in early 2022, you may have also heard speculation about rising mortgage rates.
While mortgage rates can be influenced by changes in the federal prime rate, it’s important to remember that the Federal Reserve doesn’t actually set your mortgage rate.
All banks and lenders use risk-based pricing models to determine the final interest rate of a loan. There are about 30 risk factors considered and no rate quote is final until all factors have been evaluated. A loan officer who hasn’t reviewed your credit report or income documentation has no idea what rate can be offered.
30 Factors That Influence Your Mortgage Interest Rate
- Loan Amount
- Loan Term
- Loan Purpose
- LTV (Loan to Value)
- Property State
- Property Type
- Occupancy
- Credit History
- Asset Verification
- Relocation
- Concessions
- Employment Status
- Co-Borrower
- Lock Period
- Underwriting System
- Loan Type
- Amortization
- Cash Out Amount
- CLTV (Combine Loan to Value)
- Property County
- Number of Units
- Credit Score
- Debt Tolerance Ratio
- Reserves
- Gift Funds
- Income Verification
- Employment Info
- Citizenship
- Mortgage Insurance
- Inclusion or exclusion of escrow
The mortgage process can be complicated, and the lowest rate might not be the best loan for you. That’s why it’s important to work with a quality lender like Boles Group lending team at Bay Equity Home Loans. They will put the time in to understand your financial history, your short- and long-term goals, and to make sure your mortgage truly meets your individual needs.
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Bay Equity Home Loans – Boles Group is a team of lending professionals located in Gilbert, Arizona and licensed to originate home loans for purchase or refinance in 11 states (AZ, CA, CO, Fl, GA,HI, ID, MN, NM, NV, OK, OR, WA). Boles Group lending professionals have the knowledge and experience to create solutions where other lenders create problems. The team prides itself on responsive, accurate communication and is highly regarded by clients and business associates alike.
