Does down payment affect interest rate?

Fannie Mae charges fees for down payments less than 25%. The fee for 740+ score with 20% down is .25%. The appraised value does not determine the loan to value in a purchase transaction unless the value comes in less.

You will definitely get the best rate with the lowest cost associated with it, however with current rate environment and your stellar borrowing profile, you should still be able to get a 30 yr loan at 4.5% (4.624% APR) or lower. There are some very specific rules regarding condos that you will want to address prior to making an offer on that dream home. If you need help and want to make sure you are getting the best advice possible, please feel free to let me know a good time for us to speak briefly. Best of luck.

There are many factors that effect interest rate. Property type, loan type, credit scores, and possible even down payment. Condos specifically carry a higher risk to lenders versus a single family home and come with a slightly higher interest rate. Yes, at 25% down payment, you will get a slightly better rate, usually 1/8th percent (0.125%). Secondly, an appraisal higher than the purchase price will give you a warm fuzzy feeling that you are getting a deal, but is does nothing special for you on a purchase. All lender down payment guidelines are based on the purchase price. Buying in MN or WI. Contact me to get started at www.MortgagesUnlimited.biz

Your rate will be slightly lower with 25% vs 20%, and it's based on the sale price if it comes in at 250K or above... if the appraisal comes in lower than the sale price, then you would renegotiate to the appraised value and then put 25% down of that new purchase price... Keep in mind that condo's are an inherently greater risk, and pricing for loans on condos reflect that... The best rates are for Single Family Residence that is owner occupied... WilliamAcres.com