Many Things Affect “The Rate:” Fico; LTV; 80/10/10; Condo vs. SFR

We have a borrower with a 703 FICO bidding on condos with the intention of using 80/10/10 (1st and 2nd combo) financing. He needs a high balance loan too.

There are four factors that increase this borrower’s rate (with ALL lenders):

1. Property type (condo vs. SFR): 3/4 point

2. FICO (703 vs. 740+): 1 point

3. Subordinate Financing (80/10/10 structure): 1 point

4. High Balance Loan (over $417,000): 1/4 to 1/2 point

All these factors combined increase the borrower’s rate by as much as 1/3 to 1/2 percent.

It is extremely important for borrowers to understand all these factors when they are shopping or comparing interest rates.

If a borrower just asks “what’s the rate” without conveying all these factors, he could be misquoted by as much as 1/2 percent.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646