How are mortgage rates determined?

Your credit score, down payment and loan term are key ingredients that  help determine your mortgage rate — but you’re not the only cook in that  kitchen.

1. How likely you are to repay the loan? 2. What’s going on in financial markets and the larger economy?

What factors determine your mortgage interest rate?

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Credit score

How you’ve paid credit accounts in the past is a good indicator of how you’ll handle a mortgage.

Down payment and LTV ratio

Your down payment has the second largest effect on your mortgage rate, especially if you’re taking out a conventional loan.

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The word “occupancy” is a lender term for how you plan to use your  home. The best mortgage rates go to borrowers who intend to live in a  home as a main or “primary” residence.



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