Loan Size
Lenders are paid a percentage of the loan amount they process, therefore they make less money on smaller
loans and more on larger ones. Typically, the processing cost for a $100,000 loan will be the same as a
$300,000 loan. In any event, expect to see interest rates .25% higher when the loan amount drops below
$150,000, and even more when below $100,000. If the loan is in the "Jumbo" category (over $417,000) the
rate may increase about .25%, because of the fact that the risk to the lender is higher. When the loan amount
is in the $500,000 and $1,000,000 range, expect the rate to increase between .25% & .50% and the down
payment to increase, as well. There are many factors that affect the rate that lenders charge, which reflect
the amount of risk a lender takes while granting a 15-30 year loan. | |
