1. FICO score on conventional mortgages: Rates can change by 1/8% or more depending on your credit score. FICO scores over 740 will generally get the lowest rate.
2. Property Type: Interest rate for condos are usually 1/8% higher than single family homes and townhomes.
3. Origination Fee and Discount Points: Rates are typically quoted with either a 1% origination fee or discount point. Many times this is not in the best interest of the borrower. The difference in payment on a $300,000 mortgage between paying an origination fee or not is about $25. The cost to get the lower rate is $3,000 which might not make sense to save so little.
4. Lock Period: Rates for shorter locks, such as 30 days, will be less than longer locks.
5. Home Equity Loans: Lenders will charge a higher interest rate if it’s combined with a home equity line and the combined loan to value between the 1st and 2nd is above 80%.
6. Escrows: Most lenders will charge .25% discount point to not escrow for property taxes. You must escrow if you don’t have 20% down.
7. Occupancy Type: Investment properties will have a higher interest rate than a primary or second home.
Most rates quoted will assume high credit score, single family home, 1% origination fee, 30 day closing, primary residence and escrowing for tax and insurance. It’s highly recommended you check with your lender about your specific situation and how your interest rate can be affected.