What drives your actual interest rate on a loan?

[Kevin Brunke]

I've been reading the forum for a while, listened to most of the pod casts, and have read several other real estate books, but do not currently own investment property. We have a conservative strategy we plan to pursue in the next few years to diversify our investments and secure our financial future. Nevertheless, we are currently refinancing our primary residence to lower the payment/rate and expedite paying it off to rid us of all personal debt prior to investing in other properties. I filled out the loan application last night and it said the rate was 2.75% (not locked in), we got the initial paperwork today and it gave us a rate of 2.875%. The difference is trivial for the 99k refi, but it got me to wondering what causes the difference? We both have good credit at around 820. We didn't want to bring any cash to the closing, so it's all rolled into the new loan. Are these advertised rates only for people with perfect credit? Did the financing of closing costs add additional interest? Thank you to all of the highly experienced folks who donate their time in answering questions on this forum to help people like me get a better understanding of the real estate game. Kevin