Before you make plans to buy or refinance a home, you should know some of the things that lenders will consider before offering you a mortgage rate.  While interest rates are quite low right now, compared to many years past, they are still important in determining how much you can afford when considering your Berkeley or Oakland home purchase. 

While the marketplace always plays a strong role on the lending and financing issues of the day, the general considerations are:

a. Your Credit Score: This is certainly a key way for lenders to determine how responsible you are about acquiring debt, and paying it back in a reasonable and efficient manner.  Obviously, you will be offered a much lower, more appealing, mortgage rate if your credit score is high.

b. How Much You Plan to Borrow: If you live in a high cost housing market, or plan to purchase a very expensive home, you will typically be spending more than the funds of most "confirming loan limits" for the general market, and you will need to get a jumbo loan, which typically will have a higher mortgage rate.  As your Oakland real estate agent, I can assist you in understanding this funding, so that you are comfortable with the details surrounding the parameters of these loans.   

c. Whether You Are Willing to Pay Points: If you are willing to pay more money upfront to acquire a lower mortgage rate, you should discuss this with the loan officer.  One point is equal to one percent of the loan amount, and by paying it, you could get a lower rate.

d. Whether You Intend to Live In the House: If you plan to occupy your Berkeley home as your main residence, you will be offered what is called an "owner occupant" mortgage rate, which is generally a lower rate that would be offered to you if you were purchasing the home for rental purposes.

Obviously, while these are some of the major considerations, more issues than this will be reviewed depending on the local market.  As your local real estate agent, I am prepared to assist you in details regarding the East Bay real estate marketplace.

Posted by Bruce Wagg on


Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.