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  • Your qualifying mortgage loan interest in most cases is equal to the note rate, especially on standard fixed rate mortgage loans.

    The qualifying interest rate usually comes into play on adjustable rate loans, and buy down programs.

    Your adjustable rate loan has a start rate, which is what the loan interest rate is today, and then a maximum cap interest rate, which is the worst it can ever be. When underwriting loans, the program may require lenders to use something other than the current start rate to calculate affordability.  This is usually the worst case interest rate, but can be something different.

    This rate used to determine affordability is therefore known as the qualifying rate.

     

  • What is the Qualifying Rate?  What Does Qualifying Rate Mean?

    With the most common mortgage loan, a 30-year fixed mortgage. The mortgage loan interest rate you receive is the rate that all loan qualifying, debt to income ratio’s, etc., are all based upon – Hence your “qualifying rate.”

    For some mortgage loan programs, like ARM’s, or adjustable rate mortgages, you have a starting interest rate, and then what your could possibly adjust to in the future.

    Generally speaking, mortgage underwriting rules require lenders to approve your loan based on the worst possible rate, or some other higher factor, like the worst possible first adjustment.

    If you are getting that type of loan, that possible future interest rate would be your qualifying rate.

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  • equal housing lender Minnesota, wisconsin, iowa, north dakota, south dakota

    Cambria Licensed Mortgage Loan Officer serving home owners, home buyers and residential real estate investors. Equal Housing Lender, Cambria Mortgage NMLS #322798. I am a licensed mortgage originator, NMLS #274132, and am licensed to originate mortgage loans in: MN, FL, WI, IA, ND, and SD. Lending services may be provided in certain states by Cambria Mortgage NMLS #322798. This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. The information here may not be up-to-date and may no longer be accurate. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. Actual rates available to you may vary based upon a number of factors. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. © 2023 Joe Metzler