What's The Best Interest Rate On Mortgages

What's The Best Interest Rate On Mortgages

If you are looking to refinance or buy a home and get a mortgage you want the best interest rate available. But wait...... it's not all about "just" the interest rate. You say what? Most Banks and Mortgage companies charge fees referred to as the cost of money, orgination fees, doc fees, proccessing fees...... If you shop interest rate ONLY you could be paying a lot more for a rate that you could have gotten else where for a lot less.

Here is an example of the interest rate game. Lets say you have a $250,000 loan amount with a 6% interest rate that is fixed for 30 years your payment is appx $1498 (PI) per month. Since interest rates are so low right now you decide to refinance. If refinance that same $250,000 at 3.74% with a 15 years fixed rate you would have a payment of appx. $1635. (PI). Yes it's $136 more per month but you are saving THOUSANDS of dollars in interest and building the equity in the home.

$250,000 x 6% = $1498 (PI) for 30 years  or $250,000 x 3.74 = $1635. for 15 years

Now lets take a look at the cost of getting the loan. If you purchased a few years back with a 6%, 30 year fixed rate your appx. closing cost could have been about 3% of the loan amount. You had 1 origination fee, 1 point, and misc underwriting fees, processing, fees, doc fees, courier fees .....that means on a $250,000 loan you could pay appx $7,500 to get that 6% interest rate.

Current interest rates on refinances are as low as 3.74% with no origination fees and appx $300. in closing cost fee's to as high as 4.5% with 1 origination fee ($2,500) and  1,500 in closing cost. That's a difference of $3,700.with a higher rate.

If you are shopping for a mortgage on a new home or looking to refinance you want to deal with someone local. You want to deal with a Bank that is servicing your loan and not selling it to a company in never never land. You want to be able to walk in and talk face to face with you loan servicer if you have questions of concern. Calling 800 #'s to nowhere and figuring out the web of what bottom to push is not the way it should be done.

Getting a mortgage or refinancing the current one is a major financial decision. Don't get scammed into thinking you are getting the best deal when you are speaking to a loan person who has a used car salesman attitude.

For additional information on getting a mortgage or refinancing give Amelia Stansell at BB&T a call. She is the Assistant Vice President, Financial Center Leader and Small Business Specialist. Amelia has 8 years of banking experience and financial background. Amelia can be reach at 703-468-2327. Give her a call today, she will be waiting for your call.