How is a mortgage refinancing rate calculated by financial institutions?

There are many factors that go into calculating the rate offered in a mortgage refinance. One is the risk involved in lending, in other Words, the prospective borrower's credit score and employment history, debt to income ratio, and loan to value ratio of the loan as well as the presence or absence of mortgage insurance and its amount are taken into account. Another is the type of program, whether the rate is adjustable or fixed and any other features of the program such as nontraditional payment terms. The rate at which the bank obtains the ,money for the loan is also a factor, in some cases this is based on the US Prime Rate and in others LIBOR. The bank will add a percentage to this amount in order to maintain a profit.