There are a lot of things that can change how much you pay each month for your home loan. If you know about these things, you will save time and money.
Discount rate of the Federal Reserve
The federal reserve banks lend money to banks and other lenders. The rate that the reserve bank charges the lending institution is the discount interest rate. The interest rate is set by the board of directors of the Federal Reserve Bank. This discount rate, which is also called the prime interest rate, is the interest rate that banks charge customers with good credit and a good relationship with the bank for short-term loans. At www.FedPrimeRate.info, you can find out more about the discount interest rate.
A Report of Your Credit
Information about you is collected by consumer reporting agencies. In general, they collect and sell information about where you live, what you do, if you've been sued, if you've filed for bankruptcy, if you pay your bills on time, and so on. Your lender will look at your credit report when you ask for a loan.
The FICO score is a way to figure out how likely it is that the person will pay back the home loan.
Factors in Business
Banks and other lenders of money are in business to make money by helping people. They have to find a balance between making money and being competitive. If they charge you too little based on your credit history, they could go out of business. If they charge too much, you might go to a different business. So, to get the best deal on a home loan, you should look around.
Some online sites, like lendingtree.com, offer a great service where you fill out one form and then multiple banks compete for your business.
In short, the prime lending rate, your credit report, and business conditions like competition are the three most important things. Keep a good credit history by paying bills on time and look around for the best home loan rates to get the best rates.