You’ve probably seen headlines about the Federal Reserve adjusting interest rates, but here’s the reality: The Fed doesn’t directly set mortgage rates. While their decisions can influence the overall economy, mortgage rates are determined by a much more complex set of factors.
So, What really determines your rate?
Without getting too deep into financial jargon, mortgage rates are influenced by the broader financial markets and at least 30 different personal factors that come into play when lenders determine your specific rate.
30 Factors That Influence Your Mortgage Rate
Loan Amount
Loan Term
Loan Purpose (purchase or refinance)
Loan-to-Value (LTV) Ratio
Property State
Property Type
Occupancy (primary residence or investment)
Credit History
Asset Verification
Relocation
Seller Concessions
Employment Status
Co-Borrower
Lock Period (how long the rate is locked)
Underwriting Method
Loan Type (FHA, VA, Conventional)
Amortization
Cash Out (if refinancing)
Combined Loan-to-Value (CLTV)
Number of Units (e.g., single-family, multi-family)
Credit Score
Debt-to-Income Ratio
Reserves (liquid assets)
Gift Funds
Income Verification
Employment Information
Citizenship Status
Mortgage Insurance
Escrow Inclusion
Property County
Why It Matters
Getting the best mortgage rate is about more than what’s advertised. Every borrower has a unique situation, and all of these factors come into play when determining what rate a lender will offer. While low rates might look appealing, they are often tied to ideal scenarios that may not reflect your situation.
Working with a lender who understands these details can help you make sense of the process. At Boles Group Lending, we take the time to understand your full financial picture and future goals, ensuring you’re not just getting a low rate, but the right loan for you.
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