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Factors That Determine Your Interest Rate

Many factors go into the interest rate you receive when getting a mortgage. See Below for details.

Property Designation:

Single family homes usually have lower interest rates than multi-family units. 

Use of Property:

Owner-occupied dwellings have lower interest rates than properties purchased for investment. 

You or Your Co-borrower’s Credit Score:

Interest rates can be significantly impacted by your credit scores. The better (higher) your credit score the lower interest rate you will most likely receive. If qualifying as an individual, lenders will take the middle of your three scores. If applying with a co-borrower, lenders will take the lower of the two middle scores.

Down Payment or Instant Equity:

The loan to value ratio (LTV) and/or combined loan to value (CLTV) can impact your interest rate. Loans where you have a greater variance between the mortgage amount and the value of the home will usually have a lower interest rate.

Type of Loan:

The mortgage product you apply for also has an impact on the rate. Conforming loans generally have a lower rate than non-conforming (jumbo) loans. 

Rate Lock:

Lock then Look. On purchase deals you get the flexibility to choose to pre-lock your interest rate for up to 90 days before you find your new home. Otherwise, Watson Capital Mortgage typically locks purchase and refinance rates for 22 days, but it can vary depending on your needs. There is no cost to the client if you do not find your home or the rate expires. 

Length of Fixed Rate Loan:

Longer term fixed rate loans usually come with a higher interest rate. For example, a 15-year fixed rate loan will usually have a lower interest rate than a 30-year fixed rate loan

Refinancing to Take Cash Out:

Taking cash out with a refinance changes the loan to value ratio and may increase your mortgage interest rate.

2950 Buskirk Ave Suite #300
Walnut Creek, Ca 94597
Office: (866) 434-1550
E-Fax: (888) 984-3511
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CA DRE Broker Lic #01785845
Company NMLS #2061728
CA Corporate License #4638041

Watson Capital Mortgage, Inc. is an independent mortgage brokerage company licensed to originate mortgage loans in the state of Califoria. Watson Capital Mortgage, Inc. supports Equal Housing Opportunity. Terms, interest rates, fees, promotions, and/or products listed above are subject to change or cancelation without notice and may or may not be available at the time of mortgage commitment or at the time of rate lock by either Watson Capital Mortgage or any third party company we work with.

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