What affects the interest rate in mortgages?

Question

Here is the scenario. I first started out with a 680 credit score when I approached my loan officer (at Suntrust) back in March and he gave me a 3.75% interest rate, I'm still looking for a property up to now and my credit score had jumped up to 736 so I asked him if he's able to get me a lower interest rate since it's been a few months and my score had jumped up. My loan officer then tells me yes and specifically states the the rates have lowered a bit since then so he gets me a 3.25% but he gives me an origination and discount fee. If the rates have lowered, why am I getting a discount fee?

Can anybody shed a light on this, I'm an inch close to getting a different loan officer.

Account Closed · Answer

Hi Andy,

Actually, he gave me 4 estimates  with 4 different rates 3.25, 3.5, 3.75 and 4%.

The origination and discount fee disappears at 3.75% so I'm assuming that's the one I'm actually qualified for or somewhere between that and 3.50%

Thanks

Aren

Andy Collins · Answer

in general mortgage rates are based on risk (credit score, are you taking cash out, what is your % down etc), and what the bond market is doing.

He obviously thinks you want a lower rate, ask him what the rate would be without any points

Depending on your broker you probable were going to have an origination fee with the earlier loan,,