This will begin a series of ten critical questions to ask when you are shopping for a mortgage. Just like a great REALTOR® can make all the difference in the world when it comes to finding, negotiating and closing on the home of your dreams, so to can a great lender/Loan Officer… and great REALTORS® usually know great lenders and Loan Officers.
1. What is the interest rate on this mortgage?
To help determine exactly what you'll pay over the term of the loan, you need to know the rate. Rates change quickly (sometimes hourly) but new rates are generally published twice a day. So, you can't call one lender today and another next week, and really compare apples to apples when it comes to rates. Also, if your credit is less than perfect, you may not be offered the lowest rate available. Interest rates are based on credit scores, as credit scores generally indicate a person’s ability to make good on their financial promises.
To effectively compare different lenders' programs, ask for the annual percentage rate (APR) of the mortgage interest, as well as an itemized breakdown of rates, points and fees (called a GFE... we'll discuss this in another question in this series). Note that the APR is generally higher than the initial quoted rate because it includes some of these fees. But beware: the APR found in advertisements can be misleading. Mortgage lenders don't always include all the fees they charge in the calculation that determines APR, so customers who use that figure to shop without also having an itemized breakdown of rates, points and fees may end up comparing apples to oranges.
Ryan Cave, The "Caveman"
Truth, Honor & Personal Integrity
214-789-9366
www.CaveRealty.com
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