Garbett Mortgage

Everything You Need to Know About Rates

Who and what effects the interest rate you will pay?

The lender is the person holding money. Lenders tend to be large institutions who are charged with the care of a lot of other people's money. They are careful, strive to be prudent, and are concerned that every point of detail is done exactly according to the book.

The mortgage company is simply a facilitator or middle man. Their job is to help you find someone willing to loan you money for a very long time. They also are charged with the responsibility to wade through all of the documents, forms and at times minutia to make the transaction happen.

You are the central and most important player. You are the one buying a home and borrowing money, and you are the most complex piece to the whole transaction. You are unique. You have specific preferences, abilities, background, desires, financial capacity, and needs that are different than any other buyer.

How do you influence your own rate?

You have a tremendous impact on the rate charged. You are the one who will repay a loan over a very long period of time. The uniqueness and length of time combine to create an element of risk. The higher the risk, the higher the rate you will pay. There are many different factors that determine your risk profile and go into the calculation of your rate.

Your credit score. Credit companies track your credit history on other transactions you have done. These include credit card purchases, car loans, and any transactions with institutional lenders. Items in collection, bankruptcies, and late payment histories are all tracked and compiled into a credit score. Lenders are obsessive observers of credit scores.

Your down payment. The more money you invest in the home the lower the risk of loss to the lender and the lower the rate you'll pay. The lender calls this the loan to value ratio.

Your debt to income ratio. This is the amount of debt divided by your annual income. The more debt you have the greater risk you pose to the lender and the higher your interest rate will be.

Download Brochure

Click the "Download" button below to download a PDF of our complete Garbett Mortgage brochure. In the brochure you will find a printable Application Checklist and additional information to help you in the loan application and management process. You will also find a map and driving directions to the Garbett Mortgage office.

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