The amount of your loan can increase your interest rate if the amount financed exceeds the conforming loan limits established by Fannie Mae and Freddie Mac. The conforming loan limit changes at the beginning of each year. Shorter loans, such as 20 year or 15 year note, can save you thousand of dollars in interest …
Category Archive: Interest Rates
Introductory Rate ARM’s
Most adjustable rate loans (ARMs) have a low introductory rate or start rate, some times as much as 5.0% below the current market rate of a fixed loan. This start rate is usually good from 1 month to as long as 10 years. As a rule the lower the start rate is the shorter the …
Lock in Your Interest Rate
A lock, also called a rate lock or rate commitment, is a lender’s promise to hold a certain interest rate and a certain number of points for you, usually for a specified period of time, while your loan application is processed. Depending upon the lender, you may be able to lock in the interest rate …
Fixed Rate Mortgages
The most common type of mortgage program where your monthly payments for interest and principal never change. Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable. Fixed rate mortgages are available for 30 years, 20 years, 15 years and even 10 years. There are also “biweekly” mortgages, which …
Interest Only Loans
“Interest only” products are an easy way to save money and a very popular alternative to traditional fixed rates but they are not without risk. An “Interest Only” loan can offer consumers greater purchasing power, increased cash flow and a number of other benefits which are listed later in this article. First let us start …
Standard Adjustable Rate Mortgages and the Differences
A few options are available to fit your individual needs and your risk tolerance with the various market instruments. ARMs with different indexes are available for both purchases and refinances. Choosing an ARM with an index that reacts quickly lets you take full advantage of falling interest rates. An index that lags behind the market …
Should I Pay Points?
A point, which equals 1% of the total loan amount, is an upfront fee that reduces your monthly interest rate and total interest due over the life of a loan. This means that a one point loan will always have a lower interest rate than a no point loan. Paying points is in essence a …
Adjustable Rate Mortgages (ARMs)
These loans generally begin with an interest rate that is 2-3 percent below a comparable fixed rate mortgage, and could allow you to buy a more expensive home. However, the interest rate changes at specified intervals (for example, every year) depending on changing market conditions; if interest rates go up, your monthly mortgage payment will …
Annual Percentage Rate (APR)
A tool used to compare loans across different loan programs is the Annual Percentage Rate (APR). The Federal Truth in Lending law requires mortgage companies to disclose the APR when they advertise a rate. It is designed to represent the true cost of the loan to the borrower, expressed in the form of a yearly …
Should I Wait Until Interest Rates Go Even Lower to Buy a Home?
Current mortgage interest rates are extremely favorable for buyers. In fact, rates for 30-year, fixed-rate mortgages are hovering near 30-year lows. No one can accurately predict whether rates will go up or down. Even those who follow the market for a living can’t figure out when interest rates will bottom out. If they could, they would all be …
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