Loan to value — How much you owe compared to your home’s present market value is your “loan to value” ratio.
The lower the ratio, the better.
Purpose of the mortgage — Refinance rates are usually slightly higher than loans to buy a home.
And cash-out refinances can garner an even higher mortgage rate.
Why are some mortgage rates higher than others?
Simply put, this means they charge more interest for riskier borrowers (those with bad credit, high debt ratios, etc.). Low-risk borrowers, on the other hand, typically pay less over time by securing a lower rate. So that’s why lenders offer different mortgage rates to different borrowers.
Why is my home interest rate so high?
In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. Mortgage insurance, which protects the lender in the event a borrower stops paying their loan, adds to the overall cost of your monthly mortgage loan payment.
Why is my mortgage APR so high?
Total cost and interest rate for that cost. The APR on an FHA loan will always be higher than on a conventional because of the upfront mortgage insurance. Your actual interest rate is also considerably higher than that because of the monthly mortgage insurance you pay for what is most likely the life of the loan.
Is it better to get fixed or variable mortgage?
Generally speaking, if interest rates are relatively low, but are about to increase, then it will be better to lock in your loan at that fixed rate. Depending on the terms of your agreement, your interest rate on the new loan will stay the same, even if interest rates climb to higher levels.