Jack and Jill applied for mortgages but got different interest rates. Credit scores, debt-to-income ratios, and loan type all change what rate a lender offers you.
Let's say Jack reaches out to a mortgage lender looking to get help on a home loan. Jack is looking for an FHA loan on a single family home, 740 plus credit. His debt to income's 30% and he's looking to close in 30 days. So Jack gets a fantastic deal, let's call it five and a half percent. Jack's so happy he tells his friend Jill, hey, go see this lender, I got the best deal in the world. Well, Jill comes in, she's looking to buy a condo. Can't go fha, let's say because the condo doesn't allow it. So she has to go conventional, 680 credit, 40% plus debt to income and Jill needs to close in 60 days. So a longer term rate lock. Each one of those details I purposely listed out because they all change the base level pricing. So before lenders get involved, the government or the or Fannie Mae, Freddie Mac, fha, they have their base level loan level price adjustments that change the market for that. So that could be a whole 1% of add ons to Jill's interest rate. So she might get the same lender offering the same options of products, but she might be at a six and a half percent rate. It doesn't mean the lender did her wrong, she just has a different situation. It's important to know little detail does matter when it comes to your financing.
