Wednesday, January 23rd 2019


What is the housing interest rate?

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20th Dec 2009 by Burt Carlson

The rates charged for homes are mortgage rates and are based on a borrowers credit profile which includes credit score/history, debt ratio and amount of down payment. These days a borrower must meet all three tests to qualify for a home mortgage. For the most part rates are driven by standards set by Fannie Mae, Freddie Mac and to a certain extent FHA. These entities are using risk based pricing models. This means that once the borrower meets the minimum standards for the loan there may be some risk adjustments to the pricing/interest rate. For example, the risk based pricing model has improvements for credit score up to a certain point. So a borrower with a 740 score would have a slightly lower rate than a borrower with a 680 score assuming their credit profiles were identical except for the credit score. There are also adjustments for larger down and type of property being purchased (single family home, condo, second home, investment property, etc). While the risk adjustments are the same each lender has its own pricing/rate philosophy to compete in the market so as always it is smart to shop around.

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5th Nov 2009 by Gary

A housing interest rate is an interest rate offered by a bank to mortgage a home, based upon factors like the credit and income of an individual, how much money is being put down and the quality of the home which will be used as collateral for the loan. Housing interest rates are different because of competition, and so you should check out several lending institutions before deciding on which one to use.

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5th Nov 2009 In Investing 2 Answers | 1908 Views
Subjects: housing interest rate, interest rate,

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