How Your Interest Rate is Determined
August 15, 2014
In the good old days, a buyer called a lender, gave him income, debts and permission to pull what we call an "in file" credit report, and the deed was done. A pre-qualification letter was sent out and promises made about great interest rates. The buyer then found a house, checked around with some different lenders - sometimes after the contract was accepted - to see who had the lowest rate.
Interest rates used to be the same for everyone who was looking for the same type of loan. In other words, when you talked to a loan officer about the interest rate for a 5% down payment, 30 year fixed rate loan, you got the same interest rate as everyone else looking for the same loan.
Now the lender needs to know your credit score as well. If you go to bankrate.com and search on mortgage interest rates, you'll see a place to put in your credit score and your expected down payment. So if a lender quotes you a rate over the phone without discussing your credit score, he's likely giving you the lowest rate reserved for the very best credit scores.
It is important enough to repeat ? Your interest rate is credit-score driven, followed by your down payment and how long you need the interest rate to be guaranteed.
I wrote a little more specifically on credit scores here.
A lifetime Maryland resident, Susan Pruden has the ideal foundation for selling and buying homes. After 8 years working in just about every facet of the mortgage industry, and several years with her own company specializing in marketing for real estate agents, Susan got her real estate license in 1994. Susan has earned several industry awards. The CENTURY 21 Quality Service Pinnacle Award is based on reviews from Susan's clients and is earned by a very small percentage of agents. She has earned that coveted recognition since 2012
Two others were awarded by the Prince George's Association of REALTORS®. The Distinguished Sales Associate of the Year Award is based on a mixture of community involvement, association involvement and real estate education and designations. The other, the Distinguished Service Award, is for "exceptional meritorious service."
Susan is involved in her local community. She was named Cheverly Volunteer of the Year in 2018, even having June 25th designated "Susan Pruden Day" in the Town of Cheverly. She is also a Commissioner on the Prince George's County Historic Preservation Commission and President of the Cheverly American Legion Auxiliary.
Susan Pruden has lived in Cheverly lived with her husband, Joseph, for almost 30 years.
