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How Do I Get a Good Interest Rate?

October 5th, 2017 7:03 AM by Jackie A. Graves

The interest rate is the cost you must pay each year for your mortgage — essentially the fee the bank charges you for borrowing the money.

 
What is the Interest Rate?
The interest rate is expressed as a percentage, like 4 percent, and is charged against the amount you owe on the property. It is not the same as the annual percentage rate, or APR, which you will also see on loan estimates. The APR factors in other costs, like processing fees and mortgage insurance premiums, to reflect the total annual cost of the loan.
What Determines My Interest Rate?
Many factors affect the interest rates offered to you by lenders, including your credit history, how much money you’re putting down, the term of the loan and the type of loan. The Consumer Finance Protection Bureau, a government agency, has an online tool that enables you to play with different factors to see how they influence your rate.
 
How Do I Get the Best Rate?
Compare offerings from both a broker and any lenders you talk to directly. Also compare their approaches. As a first-time buyer, you want a broker or loan officer who is willing to take the time to answer all your questions and walk you through the home-buying process.
For more information on buying a home, check out the Consumer Financial Protection Bureau’s detailed online guide, Owning a Home.

 

New York Times - To view the original article click here

Posted by Jackie A. Graves on October 5th, 2017 7:03 AM

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