Three Mortgage Interest Rate Factors That You Have Control Over

When you meet with a loan officer in Las Vegas and apply for a mortgage, you may be quoted an interest rate. The interest rate plays a big role in the cost of your monthly payments and the total amount that you end up paying the lender for the term of the loan. You may be surprised to learn that you have control over several of the factors that go into the interest rate the lender quotes you.

Credit Score

Your credit score is an assessment of your risk when borrowing money. There are three large credit bureaus that keep track of a variety of your financial statistics. You have control over a lot of what goes into your credit score. A history of paying your bills on time, using a low percentage of your available credit, maintaining just a few lines of credit, not carrying a balance and not letting any of bills go into collections can all help raise your score.

Location of the Home

Some locations have higher interest rates than others. In hot real estate markets such as San Francisco, interest rates may be higher. Houses in rural areas sometimes have a higher interest rate. There are typically fewer lenders available to service mortgage loans in these areas, and lenders may be less accustomed to handling mortgages in rural areas.

Length of Mortgage Term

When applying for a mortgage, you choose the term of the loan. The term means how many years you will take to pay off the amount you borrow. Some typical loan terms are 15, 20, 25, 30 and 40 years. The shorter the loan term, the lower the interest rate.