Borrowers Need To Beware Of Costs Related To Interest Rates
Sellers know that the offer that comes in is more than just the price - it is all the details.
Likewise, home buyers need to consider mortgage offers carefully as the mortgage is more than just the interest rate (price). Interest rates are not always an apples to apple comparison.
Borrowers Need To Beware Of Costs Related To Interest Rates. Two weeks ago I posted a blog titled "Why Is The Annual Percentage Rate (APR) Higher Than The Interest Rate", the blog included examples of the fees that make up the APR and why the APR is higher than the Interest Rate.
A low interest rate does not mean the APR will be low as well. In fact a low interest rate could have a very high APR because of Lender Fees. For this reason Borrowers need to look beyond the interest rate a lender is offering. Borrowers need to see if they are being charged additional fees like points in order to receive a lower interest rate.
These days it is very easy to see if a Borrower is being charged additional fees in order to lower the interest rate. All a Borrower needs to do is ask the Lender to provide them with a Fee Worksheet or Loan Estimate. Both of these document will break down all the fees associated with the loan. If a Lender will not provide a Fee Worksheet or Loan Estimate, then the Borrower needs to beware, because it is likely the Lender is trying to hide something.
As you can see Borrowers who are Interest Rate Shoppers, need to be very careful not to fall into the trap of just looking at who has the lowest Interest Rate. Some times the lowest interest rate is not the cheapest rate.
When shopping for a mortgage and choosing a lender, Borrowers should also take into consideration the Service, Availability, and Knowledge of the Loan Officer they are considering working with. But if Borrowers do nothing else when shopping for a mortgage Borrowers Need To Beware Of Costs Related To Interest Rates. If the interest rate sounds to good to be true, there are probably additional costs associated with it.
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Info about the author:
George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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