This is a YouTube video titled "Mortgage Rates based on Risk Level" containing a detailed explanation about how mortgage rates are determined based on various risk factors such as credit score, down payment, property type, and investment status. The content is a monologue or single-speaker explanation without indication of multiple participants or conversational exchange.
Mortgage rates are all based on risk levels. So of course, the higher the person's credit score, the lower the rate. The lower the credit score, the higher the rate, the more somebody puts down, the more skin in the game, the more bought in they are to the property. So the less risk, the lower the rate. Except there's little nuances. Like going from 15% to 20% down on a conventional loan actually is a little bit RISKIER because at 15% down, you have mortgage insurance. At 20, you don't have mortgage insurance. Fifteen situations a little bit less risky, stars, little nuances there. Also, the type of property matters. If it's a condo, that's a little bit riskier, because not only is it relying on the buyer to be in good financial standing with their payments, but also the HOA has to be financially responsible. Your neighbors have to pay their HOA dues to keep the HOA in good standing. So there's additional risk level with other people involved. The same thing with a second home or investment property. That's not the place you sleep at night, so that's a little bit riskier. If you fall on hard times, you're going to keep making your primary payment, but maybe not your second investment. Those are the first ones to slide. And on an investment, you're also relying on renters who aren't even really screened with the mortgage process to make their payments to support the whole thing. So it's all about risk level. And this is why there are differences in mortgage rates.
