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Mortgage Rate
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The mortgage rate is the rate of interest paid on a mortgage loan. With a fixed-rate mortgage, or FRM, the mortgage rate is fixed, and with an adjustable rate mortgage, or ARM, the mortgage rate adjusts at periodic intervals. The market dictates the prevailing mortgage rate, based ultimately on long-term treasury yields. Nevertheless, it often pays for the borrower to shop for the best mortgage rate, by either comparing different lenders, or working with a mortgage broker. The mortgage rate for a particular loan will also depend on various risk factors. The credit score of the borrower, the LTV, the loan size and payback period, whether the mortgage is a first mortgage or a junior mortgage, and numerous other factors all affect the mortgage rate for a particular loan.
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