A final Interest Rate or Note Rate is determined by Risk Layering that is derived from two forces Market and Underwriting. 

Risk can influence an Interest Rate both up and down.

MARKET FORCE

The ever changing push and pull between the Stock Market and the Bond Market drives mortgage rates up and down.  In theory,

 but not always, in practice rates are driven up and down by the amount of available new investment in the Bond Market.  Usually

when the Stock Market is performing poorly investors will pull money from the Stock Market and move it to the Bond Market.  This

new investment will drive rates down.

UNDERWRITING FORCE

The individual market Risk as determined during the underwriting phase will determine the final interest rate or note rate buth

up and down.  Underwriting is a thirteen step process but the most common four factors are Credit Scores, Debt Ratio, Property

Type, and Appraisal Risk.  Attached is a copy of our Risk Layering Chart which is used as a guideline for a final rate.  Altough

the overall risk of the loan determines the final rate.

Risk Layering Chart

For Questions about Risk Layer please feel free to Contact one of our knowledgeable Loan Officers who can explain the risk

factors of our Risk Layering Chart.