Interest Rates and Down Payment 
I often get asked, "Do I get a better interest rate if I put more money down?" First of all, it depends on credit scores. The higher the credit score, the better the interest rate. Let's assume a credit score of 760. (This is the best credit score bucket.) With a 5 – 19.99% down payment, the interest rates tend to be the same. If someone puts 20% down, the interest rate tends to be higher than if you put less down. HOW CAN THIS BE? The answer is easy. There is no mortgage insurance with a 20% down payment, so the investor has more risk than a loan with less down but has mortgage insurance. Therefore, the interest rate is higher with 20% down. The higher the risk, the more return the investor wants to have. This does change when 25% or more is placed as a down payment. The rate then drops to a rate as if there is less than 20% down. The moral of the story, if someone is going to make a large down payment, put 25% or more down to obtain a better interest rate.

For the best Albuquerque Mortgage   Call Steve Sheldon. Don’t forget if you or any of your friends and family are interested in Albuquerque Mortgages, Santa Fe Mortgages, or any mortgage in New Mexico contact Steve Sheldon at Superior Mortgage Services, LLC.

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