August 2, 2019

The Fed Doesn't Determine Your Mortgage Rate

Financial pundits like to talk about what the Federal Reserve is up to. You may have seen recent news stories about “The Fed” lowering interest rates. While that’s great news for consumers in general, the Federal Reserve doesn’t set mortgage rates.

Without getting too technical, rates for most mortgage products are driven by other parts of the financial markets and there are about 30 individual factors that influence the actual mortgage rate lenders are willing to offer a client.

All banks and lenders use risk-based pricing models to determine the final interest rate of a loan. Promotional rate offers found online or sent in the mail are often based on ideal scenarios that do not reflect the borrower’s actual eligibility and no rate quote is final until all factors have been evaluated. In almost all cases, this requires a full loan application including documentation.

30 Factors That Influence Your Mortgage Interest Rate

  1. Loan Amount

  2. Loan Term

  3. Loan Purpose

  4. LTV (Loan to Value)

  5. Property State

  6. Property Type

  7. Occupancy

  8. Credit History

  9. Asset Verification

  10. Relocation

  11. Concessions

  12. Employment Status

  13. Co-Borrower

  14. Lock Period

  15. Underwriting System

  16. Loan Type

  17. Amortization

  18. Cash Out Amount

  19. CLTV (Combine Loan to Value)

  20. Property County

  21. Number of Units

  22. Credit Score

  23. Debt Tolerance Ratio

  24. Reserves

  25. Gift Funds

  26. Income Verification

  27. Employment Info

  28. Citizenship

  29. Mortgage Insurance

  30. Inclusion or exclusion of escrow

The mortgage loan process can be complicated, that’s why it’s important to work with a quality lender like the Boles Group mortgage professionals at Bay Equity Home Loans in Gilbert who will put the time in to fully understand your financial history as well as your goals for the future.

The loan with the lowest interest rate may not be the best or the most affordable loan available. Working with an experienced loan officer who knows you personally is the most reliable way to find YOUR best loan.


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 nine states (AZ, CA, CO, ID, MN, NM, NV, 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.