Mortgage Info

Here are most common factors that lenders, banks and brokers use to calculate a rate and fee offer:

• Your specific middle credit score
• Loan-to-value (or, the percentage of your down payment)
• Loan size
• Loan product
• Loan term
• Lock time-frame
• Purpose of the loan (to purchase or refinance)
• Occupancy
• Property type

When you go to apply for a mortgage or request a rate quote, the mortgage company's pricing and rate will reflect these nine pricing adjustments.

The more of these factors that come into play, the riskier the loan. And this is what can make the pricing and rate much different than the national average you'll see or hear about in the news.

Let's say the average national 30-year fixed rate mortgage is 3.91% with .6% in discount points. Here's how that could play out in this scenario:

• Your credit score is 700
• Your loan-to-value is 80% (so you have 20% equity or down payment)
• Your loan size is $418,000
• It's a conforming loan
• 30-year fixed-rate mortgage
• You have a 30-day rate lock
• $40,000 cash-out refinance
• Single-family home
• Primary residence

Here are the factors that can affect the cost of your mortgage:

• The credit score, because it is lower than 760. (You can check your credit scores for free on Credit.com to see where you stand.)
• 80% loan-to-value carries lower risk
• Loan amount, because it is greater than $417,000
• It's a cash-out refinance, which can increase cost

It would not be uncommon to see a scenario like this resulting in a rate of 4.125% with .5% in discount points, for example.