Not all mortgage rates are the same! Mortgage rates can vary based on the lender you choose and the type of loan you're interested in. Fixed-rate mortgages keep the same interest rate throughout the entire term, while adjustable-rate mortgages can change their rates after a certain period. You can use our free financial calculator to understand how even a slight adjustment, such as “0.125%,” can affect the total interest you pay.
What Factors Impact the Mortgage Rate You Qualify For?
Several factors determine a mortgage rate offered to you by a lender, including your credit score, down payment, loan amount, and whether it's your primary residence or an investment property. Paying points in advance can also affect your interest rate. However, Lisle Savings Bank prioritizes down payment percentage over your credit score when pricing your mortgage rate. This accessibility makes securing financing easier for people with limited or no credit history.
Secondary Mortgage Market vs. Portfolio Lender
There are two types of lenders: the secondary mortgage market and portfolio lenders. The secondary mortgage market is a marketplace where lenders and investors buy and sell home loans and servicing rights. Lenders who sell to the secondary mortgage market must follow specific guidelines set by the market. If your loan is sold, you may have to change where you send your mortgage payment.
On the other hand, portfolio lenders originate and keep your mortgage instead of selling it on the secondary mortgage market. These lenders may provide more flexible underwriting standards, which benefit borrowers with unique circumstances, such as self-employment or recent employment changes. However, they may require higher down payments or charge additional fees depending on the situation. Since they retain your mortgage, they have the freedom to price their products differently and create niche mortgage programs. You don't have to worry about where to send your mortgage payment because your loan isn't sold.
As a portfolio lender, we believe in building long-term relationships with our clients. We make, keep, and service your loan, and we are invested in your long-term success. While we may require a higher down payment than lenders who sell to the secondary mortgage market, we price our mortgages accordingly. If you're looking to get a mortgage, consider connecting with one of our experienced local Loan Officers, and/or check out our highly competitive mortgage rates & loan programs for first time homebuyers and first time homeowners.