Andrew W. Conner, CMPS ®, CRMS ® 

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The Truth About Interest Rates 

Where are interest rates going?  How do you know when you are getting the best interest rate?  Learn the secrets lenders use in their advertisements and learn the truth behind the rate game.   While rates remain relatively low, you need to understand the basis on which rates are advertised. 

Advertised rates are based on a “Base” rate which requires the borrower to have a minimum credit score of 740,  a minimum loan amount, and a loan to value at 60 percent or less.  If you do not exactly fit these criteria, you simply do not qualify for the advertised rate.  So if your credit score is 739 you may not qualify for the advertised rate.  This doesn’t mean you won’t get a good rate, but just not the advertised rate.  As the loan to value goes up and your credit score goes down there are rate adjustments that make your rate higher than the advertised rate.  So it is not uncommon for some people due to their personal financial situation to pay up to 1 percent or more over the base rate.   

Without some basic information (a complete loan application) of your financial situation it is very difficult for a lender to accurately quote you an interest rate.  Yes, it is the habit of many lenders to quote you a very low rate in order to get their phones to ring.  In reality, few people actually qualify for the advertised rate due to their individual financial situation.   

Everyone has a different financial situation that the lender needs to evaluate.  Three main factors that all mortgage loans are based on are: PEOPLE, PROPERTY, and PROGRAM. Each one of these factors plays a major role in the financing of a home.  We will discuss each one briefly.  

PEOPLE:  This would include credit score, credit history, amount of assets, job history, income level, and overall ability to repay the loan.  

PROPERTY:  Type of property would include mobile, modular, single family, duplex, farm, condo, log home, earth contact, and lakefront homes.   Also a factor is the value of the property and the overall condition of the property. 

PROGRAM:  Loan to value is a key component, and next the loan program both determine your final interest rate based on the risk associated with these mortgage loans.  Conventional up to 80 percent loan to value, FHA up to 96.5 percent loan to value and USDA /VA with up to 100 percent financing.  

The media and most lenders quote you the base rate without taking into consideration these factors, and then when you are further into the loan process they will tell you that you don’t qualify for the advertised rate.  So if your lender quotes you a rate without taking a complete loan application don’t be surprised if your rate is not the advertised rate.   

Mortgage planning is part of getting the best interest rate for your individual financial situation.  Believe it or not it is possible to have a higher interest rate and a lower monthly payment.  The lowest interest rate available may be on a 15 year, but it does not give you the lowest monthly payment. Also if you are in a situation where your loan to value is greater than 80 percent your loan will require mortgage insurance, which will also make your payment higher.  You may want to consider a government loan that might offer  a higher interest rate but a lower payment because it has either no mortgage insurance or reduced mortgage insurance.  Is rate really the only thing you need to concern yourself with?  How important is your monthly payment?  The terms and conditions of the loan program can be more important than the interest rate! 

Mortgage options are still available, is your lender offering you options?  You need to work with a lender that takes the time to find out your personal financial goals.  Your mortgage needs to meet those goals.  The terms and conditions should help you achieve both your short term and long term financial goals.  As your Certified Mortgage Professional, I take the time to completely qualify you for your mortgage before quoting you an interest rate.    

If you have questions or comments please email them to    

Call Andrew today at 573-302-0600   



Andrew W. Conner NMLS # 245474


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