 TITLE: Can I Buy a House With a 700 Credit Score? CONTENT: What Do Mortgage Lenders Consider When Determining Your Interest Rate?\n----------------------------------------------------------------------\nA mortgage loan is a major financial commitment, both for you and your lender. As such, mortgage lenders look at many different factors during the underwriting process to determine your eligibility and, if approved, your interest rate.\n*   **Credit score**: Again, your credit score is an important indicator of how you've managed credit in the past, and how a lender can expect you to manage your debt payments in the future. The higher your credit score, the better your chances of getting approved and scoring a lower interest rate.\n*   **Down payment**: A down payment reduces some of the risk associated with lending because you're borrowing less money. Most lenders have a minimum down payment requirement, but the more money you put down, the higher your chances of getting a reduced rate.\n*   **Debt-to-income ratio**: Your debt-to-income ratio (DTI), or the percentage of your monthly income that goes toward debt payments, shows how much flexibility you have to take on another debt payment. If it's too high—lenders prefer 36% or less, but some may allow for higher—it could make it difficult to get approved. And the lower your DTI, the less of a risk you pose to the lender, which can result in a lower interest rate.\n*   **Loan term and loan size**: Higher loan amounts and longer repayment terms present more risk to lenders, so they may be associated with higher interest rates. But if you reduce your loan amount by making a large down payment or buying a cheaper home and choose a 15-year mortgage over a 30-year mortgage, it could help you qualify for a lower rate.\n*   **Loan type**: Government-backed loans typically allow for lower credit scores because they're at least partially insured by a government agency if you default. However, the trade-off is that they may end up costing you more in the form of mortgage insurance and other fees, which can impact your loan's annual percentage rate (APR).\n*   **Home location**: The cost of doing business and competition can vary by state and even by city. As a result, some regions may naturally come with lower mortgage rates than others, even if you're working with a national lender.\nThese are just a few of the factors that go into the underwriting process. Lenders may also consider your type of employment (self-employed versus working for a company), other debts and information on your credit reports, recent credit applications, cash reserves and more. END