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What Are Your Rates?
APRIL 18, 2014

As mortgage rates are rising, we receive calls daily about what rates are doing and what rate can a customer expect if they choose to do business with us.  If only it was that easy!  Rates are an exact science now, and, in fact, an experienced lender would tell you that without a lot of information exchange, a viable rate cannot be determined.  You will still see quotes on the internet, verbal quotes from lenders that may be trying to entice you their way and estimated rates based on PERFECT scenarios.  Today’s mortgage customer is rarely the perfect scenario, so that rate you were quoted is worthless the minute the words left the lenders mouth.

Rates are fluid with the market conditions and can change multiple times in a day.   As a general rule of thumb, positive economic news will tend to push the price of mortgage bonds lower and favor the Stock markets.  This means positive news may sometimes cause rates to increase as the demand for bonds is diminished and vice versa with negative economic news.    Given that the standard is a moving target, knowing more about the client and the terms of the loan are a must in order for a rate quote to be provided.   In fact, an industry publication put out a list some few months ago and it was a reality check for a consumer shopping rates.  Below is a similar list to help you understand all the factors that could affect the rate you are quoted for your specific transaction. 

  • Loan amount
  • Loan to Value ( as a percentage of the value, how much do you want to borrow?)
  • Combined LTV – is there a second mortgage?
  • Credit score
  • Credit history
  • Escrow preference – include in payment or not
  • Closing date
  • Loan type
  • Property type – single family home, condo
  • Occupancy
  • Residency – do you reside in a community property state
  • Available assets
  • Asset seasoning – how long have you had the asset at its current average balance
  • Coborrower
  • Debt ratio – all debts to income
  • Housing ratio – payment to income
  • Improvements needed  to the subject property
  • Employment type – salary, commission, self employed
  • Employment history
  • Documentation available
  • Seller contributions
  • Gift funds needed
  • Refinance or purchase
  • Cash out refinance or rate and term
  • Fixed or Adjustable rate preference
  • New or existing construction

So when you are ready to choose a lender, make sure at least some of the information above is requested so that you might be able to rely on the information you receive.  Anyone can quote a number, but an experienced lender will want to provide the most accurate information to help you make a wise decision.

 Call us to find out about your mortgage options! Call us today!

Posted by Pam Woodall

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