Understanding Rates

      Two Types of Rates:

1)      Advertised Rates – what the lowest available rate is for a given day or week

2)     Actual Rates – what you actually qualify for once you loan has been approved.  

 

 Rates and Fees go Hand in Hand

Every home loan involves fees, such as loan origination, discount, underwriting, processing, broker, transaction, settlement, government and escrow costs. The Lower the Rate the Higher the fees.  Every lender should be able to give you an exact quote of their fees. Some fees are paid when you apply for a loan (such as application and appraisal fees), and all others are paid at closing.

"No cost" loans are sometimes available if the rate allows enough overage to the lender, but you will end up paying a much higher rate. Have your lender prepare a break-even analysis to see if a “No-cost” mortgage is right for you.

·         Ask what each fee includes. Several items may be lumped into one fee.

·         Ask for an explanation of any fee you do not understand.

·         Ask for a guarantee of these fees.

·         Ask about locking-in your rate.

·         Ask about what fees affect you’re A.P.R.

If a Lender has presented you with an offer:

·         Will they Guarantee the Rate with a written Lock-in Commitment?

·         Will they Guarantee their fees in writing?

·         A Good Faith Estimate is only an Estimate, the lender is in no way obligated to honor it.

 

Protect Yourself:

It is vital that the lender gives you a written rate lock commitment. History has proven lenders that say you are “locked” without providing proof will float your rate in hopes of making more money. If the market goes sour during the loan process you could be a victim of paying a higher rate or paying additional fees. Typically lenders that do not charge to lock-in your rate are known for this.

*Remember rates and fees are subject to market conditions until locked.

Conclusion:

Until we or anyone else completes an application it is impossible for anyone to give you an exact rate and fee quote on your mortgage loan until they have taken an application and processed your loan through underwriting.  Mortgage Xperts can usually complete this process in less than 1 hour. Once your loan has been Approved you will be eligible for our Rate Lock Guarantee. It is possible that once we complete your application you may be eligible for a lower rate or reduced fees.