About Interest Rates:

Do you understand the philosophy used by lenders to determine the interest rate they will charge you? It’s really quite simple!

You bring your own interest rate to the table!!

That’s right, for all intensive purposes… on any loan, it’s basically UP TO YOU as to what your interest rate will be…

Most people outside of the finance industry have trouble grasping the following:

A MORTGAGE IS ACTUALLY A LOAN AGAINST YOUR INCOME; NOT SIMPLY A LOAN AGAINST THE VALUE OF YOUR HOME.

The loan decision is based on “How you can repay a loan”, using 3 main factors:

Ability
Stability
Credit Score

These are the 3 main criteria of the underwriting process for every loan decision… and each one is controlled by you! These can be further defined as:

Ability = Your ability to repay the loan, based on your ability to document your current monthly income.

Stability = How long have you been earning this income and does the lender have a fairly stable comfort level your income will continue?

Credit Score = How much credit has been extended to you, for how long a period of time with a history of how you have repaid those obligations.

When you present this information to a lender, in essence you are bringing either a lower or higher rate to your table. It’s all based on your ability to document your income, the stability that your income will continue and your credit history. It’s as simple as that.

“The only thing a lender like’s more than loaning money, is getting it paid back”!

Lenders evaluate risk to reward when setting rates. The riskier the loan the higher the rate! If you were lending your own money… wouldn’t you want it the same way?

This is what all lenders use to determine their risk when setting your rate. As Donald Trump points out in his book, Think Like a Billionaire… he views interest rates as “the cost of money; it’s simply the amount you pay to use the money per year”.

With that being said, view the other free reports found on this website… you will find the actual interest rate you pay on a mortgage is not nearly as important as the profitable opportunities you will lose by not having a mortgage.

Back To Free Reports

Through The Eyes of A Lender

About Credit Scoring

Credit Watch Gold

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