Expert Thoughts When Shopping for Mortgage

Currently mortgage rates are low, this is providing savings to people who are shopping for a new home or wanting to refinance their current home.  The mortgage process is not well understood by many borrowers. Borrowers should take some time to understand the mortgage process.  This could save the buyer thousands of dollars.  Before making a loan decision the annual percentage rate (APR) needs to be understood.  This rate includes fees that are charged by the lender and added to the quoted loan interest rate.  For example, the quoted loan rate may be 2.5% but your actual APR is 2.8%.  The APR represents the cost a borrower will pay over the life of the loan.  Borrowers need to realize there is up front cost to obtain a mortgage over and above the quoted interest rate.  These fees include closing cost and processing fees expressed as a percentage.  These fees will vary from state to state and between lenders.  In addition, APR does not include costs such as appraisal, title insurance, and recording fees.  Finally, do not always rely on APR when comparing loan offers, because fees between lenders can vary.