Factors Affecting the Best Mortgage Bank Rate Available

Things have changed considerably with the recent credit crunch and even the best mortgage banks have restricted their lending capacities. While earlier credit was flowing and the best bank mortgage loans were easily accessible, it is a whole different scenario now. Getting a mortgage home loan and the best rates available is a lot harder now, with banks imposing stringent conditions on applicants.

1. Credit Score

If you are considering applying for a home equity loan mortgage, there are some factors you need to consider, with one of the most significant factors being your credit history: are you creditworthy? That will be assessed by evaluating your credit score and credit reports.

2. Inflation Rate

Although credit scores are important, equally important are external factors that are beyond the bank's control, namely, inflation. The rate of inflation affects rates significantly.  An increased rate of inflation directly affects the bank mortgage rates by increasing the interest rates.  On the other hand, a decrease or stability of inflation tends to reduce or keep rates leveled.

3. Stock Market

Stock market fluctuations affect mortgage rates they depend on the capitalist fundamental of supply and demand. Credit supply in financial markets is impacted by stock market fluctuations, thereby causing a direct impact on bank mortgage rates.

4. Inter-Bank Lending Rates

Movement in the credit market affects the mortgage rates and inter-bank lending rates are a main contributor to that fluctuation, affecting directly the mortgage rates offered to customers. The Cost of Funds Index (COFI), LIBOR (London Interbank Offered Rates), Federal Fund Rate and Constant Maturity Treasury Index (CMT) indicate the variation in the mortgage rates.

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