WHY MORTGAGE RATES MATTER

Am I getting the best mortgage interest rate?

Often, we are asked about mortgage rates and how does a consumer get the lowest rate. The better question to ask is “What is the best mortgage rate for me and my family’s financial goals.”

Lower isn’t always better.

There are a lot of different mortgage products, down payment options, and mortgage insurance options. What is right for you can only be answered by a good Mortgage Loan Originator who can help you determine what the best option for you and your family is.

The option with the lowest interest rate may not actually be the best option.

There are a variety of factors that determine the interest rates you would be offered. It is important to remember not just one of these factors determines your rate, but the combination of factors together does.

A few Factors that Determine Rate

• Credit Score
• Loan amount
• Down payment
• Rate type – adjustable or fixed
• Loan term – 15-, 20-, or 30-year term; in general, shorter terms would have lower rates
• Loan Product -such as VA, FHA, or Conventional
• Mortgage Insurance

As you can see, it isn’t always easy to take an apples-to-apples approach. Mortgage rates can change throughout the day, every day. The rate you are quoted now may be higher or lower than a rate published at any given time.

Also, rate is not the only thing to compare. The annual percentage rate (APR) measures the total cost of borrowing money. APR is designed to represent the long-term cost of a loan, from closing day to the date it’s paid off. The APR includes the lender fees such as mortgage insurance, discount points, origination fees and other closing costs. The lowest interest rate is not always the best APR rate.