Why didn't I get the same rate?
(aka, Why didn't I get the same rate you gave my friend/neighbor?)
There are four major factors that come into play when we determine your interest rate:
- Closing Costs – the amount of money it costs to close your loan
- Interest Rates – and pricing in the current market
- Time – including capacity within the industry/investor/lender
- Specific Loan Factors – LTV, DTI, purpose, type, etc.
1. Closing Costs
For a loan, costs are pretty much the same except for the title insurance and intangibles taxes:
- Basic costs of processing and underwriting the loan.
- Third-party costs for checking credit, flood zone, employment, and fraud guard.
- Attorney costs for closing the loan, searching the title history, recording the loan at the courthouse, paying off your old loan, and dispersing funds.
The first three items are fairly constant at $2,500 total.
Then add a percentage for Title Insurance and Intangibles Taxes in GA: 0.25% and 0.30% respectively, for a total of 0.55%. On a $300K loan, that comes to another $1,650 — for a grand total of $3,650 ($2,500 + $1,650). You can compute your own expected cost this way.
2. Interest Rates
There are many rates and costs/rebates available each day. A typical rate table for a 20-year loan with a $350,000 loan amount looks like this (simplified example):
| Rate | Net Price | Credit / Fee |
|---|---|---|
| 4.625% | 103.539 | $12,315.72 |
| 4.500% | 103.459 | $12,037.32 |
| 4.375% | 103.463 | $12,051.24 |
| 4.250% | 103.279 | $11,410.92 |
| 4.125% | 103.133 | $10,902.84 |
| 4.000% | 102.985 | $10,387.80 |
| 3.875% | 102.908 | $10,119.84 |
| 3.750% | 102.509 | $8,731.32 |
| 3.625% | 102.317 | $8,063.16 |
| 3.500% | 102.040 | $7,099.20 |
| 3.375% | 101.643 | $5,717.64 |
| 3.250% | 101.198 | $4,169.04 |
| 3.125% | 101.413 | $4,917.24 |
| 3.000% | 100.981 | $3,413.88 |
| 2.875% | 100.446 | $1,552.08 |
| 2.750% | 99.720 | ($974.40) |
The Net Price is the amount of money you pay (shown in red) or receive (shown in black) for that rate.
Example 1: Pick a rate for a $350K free refi
Costs = $2,500 + 0.55% of $350K ($1,950) = $4,450 total.
We need a rate that pays at least $4,450 in rebate. That means using 3.375%, which pays back $5,717 — covering costs and leaving ~$1,267 in profit.
Example 2: Pick a rate for a $200K free refi
Costs = $2,500 + 0.55% of $200K ($1,100) = $3,600 total.
Rate table for the $200K loan:
| Rate | Net Price | Credit / Fee |
|---|---|---|
| 4.625% | 103.563 | $7,126.00 |
| 4.500% | 103.485 | $6,970.00 |
| 4.375% | 103.494 | $6,988.00 |
| 4.250% | 103.308 | $6,616.00 |
| 4.125% | 103.097 | $6,194.00 |
| 4.000% | 102.951 | $5,902.00 |
| 3.875% | 102.863 | $5,726.00 |
| 3.750% | 102.462 | $4,924.00 |
| 3.625% | 102.295 | $4,590.00 |
| 3.500% | 102.007 | $4,014.00 |
| 3.375% | 101.609 | $3,218.00 |
| 3.250% | 101.160 | $2,320.00 |
| 3.125% | 101.398 | $2,796.00 |
| 3.000% | 100.965 | $1,930.00 |
| 2.875% | 100.431 | $862.00 |
| 2.750% | 99.701 | ($598.00) |
At 3.500%, the rebate is $4,014 — only $414 left after costs, not enough profit. Moving up to 3.625% yields $4,590, leaving ~$990 in profit.
Result: The $200K loan gets 3.625% while the $350K loan gets 3.375% on the same day using the same rate sheet.
3. Time / Capacity
A true interest rate table has a column of prices for each lock period. The examples above show 30-day rate lock pricing. There are also 45-day, 60-day, and longer rate locks, each with their own pricing columns.
Capacity also factors in. When more people are buying homes and refinancing, wait times grow. Lenders have fixed capacity for underwriting and closing loans — like an amusement park where longer lines form on busy days. A "fast pass" of sorts exists, but only for purchase transactions, not refinances. So if you come in at the tail end of a refinance boom, you may need a longer rate lock, which can affect your rate.
4. Specific Loan Factors
The pricing examples above are greatly simplified. Common factors that can affect your quoted rate include:
- Purpose – purchase, refinance, or cash-out refinance
- Occupancy – primary residence, second home, or investment property
- Credit Score – priced in 20-point brackets from 580–760 (e.g., 580–599, 600–619, etc.)
- LTV – the ratio of the Loan amount To the Value of the property
- DTI – the Debt To Income ratio of the borrower (under 45%, over 45%, over 50%)
- Loan Size – larger loans may have bonus points
- Product Term – 10, 15, 20, 25, or 30 years all carry minor adjustments
- Escrow Account – whether or not one is included
When searching for an interest rate, be sure to mention any special factors upfront so that the rate you're quoted matches what you'll be offered once all your information is submitted for underwriting. Many of these factors are outside our control, but being transparent from the start helps ensure a realistic assessment and avoids surprises later in the process.