Calculating Mortgage Interest Rates Could Get Even More Complicated

From the Desk of Don Draughn, Mortgage Professional

Website: http://ahfmortgage.elliemae.net/ddraughn

http://www.dondraughn.com/

According to CNNMoney.com, mortgage interest rates could begin to see some very interesting formulas emerge when it comes to calculating what interest rate will be offered to borrowers. The article that was posted on May 7 can be read at "The New Mortgage Rate Calculus".

According to this article, mortgage rates could see some criteria resembling that used to calculate homeowner's insurance rates which "takes into account dozens of factors, including your neighborhood, whether your house is brick or wood, its replacement cost, its proximity to a fire hydrant, your credit score and past insurance claims for the house before you bought it."

This will make it even more important to be prepared when applying for a mortgage. Borrowers, particularly First Time Home Buyers, need to be ready to provide the banks with a multitude of information that they did not have to provide in the past.

The most important thing that borrowers need to be prepared for is a high scrutiny of credit history. Credit scores are extremely important as well as payment history. What used to be considered minor blips are no longer minor. If a credit problem occured because of something out of your control, be prepared to prove it with documentation - including copies of medical records if it was an unexpected illness that brought on problems.

You can learn more in an article I posted several weeks ago entitled "I Want to Buy a Home. Where Do I Go From Here?"

Don Draughn is a Professional Mortgage Consultant and a Sale Manager at Affordable Home Funding, Inc. located at 900 Perinton Hills Office Park, Suite 970, Fairport, NY, 14450. His phone number is (585) 425-5811 or Toll Free (877) 223-0480 ext. 111.

REGISTERED MORTGAGE BROKER - N.Y.S. BANKING DEPARTMENT

Loans arranged with 3rd party providers. Borrowers must qualify.