Need A Mortgage Rate Quote? What It Should Include
By Wilhem Kearnes
With interest rates at the lowest levels in decades, taking a look at buying a house or refinancing your existing property is more attractive than ever. TV and magazine ads abound for companies offering interest rates that could literally save you tens of thousands of dollars over the life of your loan, even lowering your monthly mortgage payments to a level that gives you extra dollars in your pocket every month. But when you go to have a new rate quote for a mortgage, you’ll want to keep several things in mind so you get the best deal on your re-fi or new home mortgage.
First, you should look at the base interest rate you will be accepting. Lenders base this number off of the rate the Federal Reserve charges banks and other lenders to borrow funds from the government. Some companies are using initial rates that are extremely low in order to attract customers. However, many of these rates will change after the initial offering period. This type of mortgage is called an ARM or an Adjustable Rate Mortgage.
Processing fees are another way mortgage companies make money. One way to save yourself a substantial amount of money is to pay these fees up front instead of having them included in the mortgage. That’s because you wind up paying interest on those processing fees as well as the interest on your mortgage. This may require you have more money for your initial outlay in the beginning but you’ll save more in the long run. When getting your mortgage rate quote, keep a sharp eye out so the mortgage company doesn’t put those fees into your mortgage payment.
Another way mortgage companies can make more money is by putting the closing costs and other associated fees into your loan. If you can keep those fees out of your loan as well you’ll keep from having to pay interest on those fees. By taking the time to thoroughly go over your mortgage quote and by ensuring that the only money you’re paying interest on is your home, you’ll be able to save a substantial amount every month.
Since interest rates are so low, now may be the best opportunity you’ll ever have to get financing for that dream home or to refinance your existing mortgage. But the corollary to the old adage “What goes up must come down” applies as interest rates will definitely go back up at some point in time. However, when getting a rate quote for a mortgage minding the details can keep you from overpaying for a home loan.
If you are getting a mortgage rate quote, there are many things you should get information on because it could affect your payment. Sammamish Mortgage can help you find Seattle refinance and mortgage loan programs that fit your needs.