Getting To The Bottom Of Advertised Mortgage Rates

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Author: D Sewell

Article source: http://www.articledeshboard.com/. Used with author's permission.

Almost everyone has heard the ads on the radio or television for very low mortgage rates. Chances are these advertised mortgage rates sound great and they may even motivate you to call the company and inquire about a refinance. however like anything that may sound to good to be true these low rates normally are, and many people do not qualify for these loans and are instead steered towards a higher rate program when they apply.

What Determines Interest Rates

The main basis for these interest rates is going to be your credit score. The assumptions of the mortgage company is that you will have a 720 or higher credit score when you apply for the loan. Since the average credit score in America is in the high six hundreds they already know most people will not qualify.

Any low rate mortgage program is generally based on borrowing up to 80% of the appraised value of your home. Go over that 80% and the rate goes up accordingly. While many people have the required equity in their home the vast majority of Americans do not. This again stacks the cards in favor of the mortgage company and opens up the door to try and sell you on different program.

To get the lowest advertised mortgage rates you will need to do just a interest rate refinance and not pull any cash out of the property. If you decide you need cash back at closing the interest rate will normally increase one quarter to one half percent. This is due to wholesale rate pricing and cannot be changed by the mortgage broker.

While some consumers may qualify for the low teaser rates the vast majority of borrowers will not. What these ads are meant to do is get you to call or stop by the company so they can try to sell you a program that you qualify for. But by assessing your situation ahead of time you can save yourself the hassle and frustration of dealing with this method of deception.

If you are fed up with dishonest lenders and want to learn more about Qualifying For the Best Mortgage Rates and other useful mortgage information written by a Wisconsin Mortgage Broker then head over to www.mkemortgage.net and check it out