When is your interest rate not your interest rate? When lenders evaluate a loan request, review your credit history, your income and how much money you have in the bank, among a host of other approval factors. That's when Just as a lender can evaluate your request for a loan approval a loan also has different factors it takes into consideration when deciding which rates are available for any particular borrower. They do this by implementing Loan Level Pricing Adjustments, or LLPA.
Each loan program has an associated matrix that contains different information about the borrower and the property. A pricing adjustment, or rate adjustment can raise or lower your rate. This is also called Risk-Based Pricing. For example, if you have 20 percent down your rate will be lower than if you have five percent down. The higher the risk (less down payment) the higher the rate.
Another adjustment is made based upon a credit score. If your credit score is higher than 740 your rate will be lower than someone with a score of 620. Credit score adjustments can be made in ranges from 620-639, 640-659, 660-679, 680-699, 700-719, 720-739 and greater than 740. Valuation adjustments are made when loans are less than 60 percent loan to value, between 60 and 75 percent, ทาวน์โฮมมือสอง 75 and 80 percent, 80 and 85 percent and higher.
That's why an interest rate you see in an advertisement may not be readily available. There are simply too many variables to quote one universal rate for everyone. Advertised interest rates are typically reserved for those with excellent credit and solid equity. But if you receive a rate quote different than what you see listed, it's likely the loan level pricing adjustments are the culprit, or your credit score didn't allow you to qualify for that lower interest rate. So remember to keep all the varibles in mind when applying for a loan.
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