Mortgage interest rates have been rising; however, it is still possible to find a good deal if you take the time to do your homework and research mortgage lenders. Here are tips to help you research mortgage interest rates and understand the numbers and terminology mortgage lenders throw at you.
Research Interest Rates
Start your mortgage search by checking current interest rates and trends in the market. Mortgage interest rates follow securities on Wall Street; while it is extremely difficult to forecast interest rates you can watch market trends and make an informed “guess” as to when interest rates will be favorable for you.
What is the Annual Percentage Rate?
The annual percentage rate can give you a rough approximation as to which loan offer is a better deal. The calculation lenders are required by law to provide expresses the costs of borrowing in a yearly rate. The Annual Percentage Rate was intended to prevent lenders from hiding or disguising fees in their loan offers. The only problem with the Annual Percentage Rate is that it does not factor in many of the closing costs. You will need the “Good Faith Estimate” in order to make an informed decision as to which mortgage loan is best.
Lock in Your Interest Rate
Mortgage rate guarantees are a mortgage lender’s promise to hold your interest rate and points for a certain period of time. This guarantee is to allow you time to close on your mortgage. Your mortgage lender may charge you a fee for this guarantee; make sure the lender grants you enough time to close. If you are not able to close on the mortgage prior to the expiration of the guarantee, the lender could change the terms of you your loan.