Mortgage rate tips

Mortgage Rate tips

Your home loan rate has 2 parts you need to be aware of

Your "price" of your home loan is the rate plus any lender fees for that rate. The rule of thumb is the higher the rate, the lower the lender fee and vice versa. As an example, a rate of 4% could have lender fees of several thousand dollars, while a rate of 4.5% could have zero lender fees. The 4% rate of course would have a lower monthly payment. But is it worth it to pay lender fees to get that lower rate? That depends on what makes sense for you, based on your unique si

The Fed Hike/Cut Means Very Little For Mortgage Rates

There's a common misconception that the Fed "sets" (or hikes/cuts) mortgage rates directly. Even among people who know better, there is often a belief that changes in the Fed Funds Rate (the thing the Fed actually hikes/cuts) translate immediately in some direct way to changes in mortgage rates. No... What is the Fed Funds Rate? The Fed Funds Rate is a target set by the Fed for interest charged by big banks to lend money to each other on an overnight basis. It has several p

Locking Your Mortgage Rate

At some point during the mortgage process, the contract interest rate (the one that ends up on the Promissory Note--the most official document stipulating the terms of repayment) must be “locked.” This means that there is an agreement between the borrower and the lender regarding what the contract rate will be. The rate-lock will also specify a date by which the mortgage must be closed and funded. Lock Time Frames Rate lock time frames can vary. Historically, the most common

APR vs the Rate -what's the difference?

Closing costs and lower rates-what to know. Why isn't the lowest interest rate the most advantageous option? Initially, lower rates typically entail higher lender fees (points). It's important to consider a break-even point when factoring in closing costs, points, and fees. For instance, if obtaining a specific rate costs $5k while a higher rate comes at no cost but results in a $100 higher monthly payment, it could take up to 50 months to reach the break-even point! Given t

Shop the Loan price not the rate --what does that mean?

Loan price is the rate plus the lender fees for that rate Lenders who play the rate game know nearly everyone focuses on the rate and/or the annual percentage rate (APR). Because that's what the online pundits tell people to do! But only paying attention to the rate allows these unscrupulous lenders to use misleading tactics to trick and confuse by quoting low rates and APRs, while minimizing details on the lender fee you would pay for that rate. To give you an example , h

Rate secrets you need to know

Mortgage rate averages nationwide

How Rates move Conventional and Government lenders set their rates based on the pricing of Mortgage-Backed Securities (called MBS) which ar

Why Mortgage Broker rates are lower than banks and big lenders

Why are they lower? A well connected and well priced mortgage broker-especially a small one who owns their own loan company-will have much lower overhead than larger lenders and banks. To simplify what this means to you--- a lender with high overhead must "markup" the wholesale cost of loan funds to turn a profit--a much larger markup than a lender with low overhead, like the small mortgage broker cited here. And here is the fact most people don't know..... The big secret i

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