Isn't that what every mortgage
YEAR FIXED RATES
5. 75 % - apr. 6. 371%
(8.502 - 5yr)
6. 75% - apr. 6.
891% (7.346 - 5yr)
as of March 1, 2002
link at bottom of the page)
TO KNOW, WHAT THEY DON'T WANT YOU TO KNOW?
Both of the above rates were real on the date listed. One
was a great deal, the other was not. The cheapest rate
had an extra 5 points attached. On a $150,000 loan amount
that's $7,500. "BUT, look at the APR."
you say. Yes, the APR is correct. The truth lies in the
fact that the extra points are amortized over a thirty year
term. The average person keeps a loan for about 4 years
and a house for about 5. If you really have the loan for
30 years and the extra $7,500 to spend, it can be a good
deal. Your break-even point is 78 months (6.5 years) and
after that you are ahead of the game.
on the other hand, you are like most people and re-finance
or sell in 5 years or less, you need to consider what the
APR over a 5 year term would be 8.502% and you would not
even break even.. Although I have all rates available, I
can't in good conscience ever recommend paying extra points.
Getting a mortgage is expensive enough as it is and even
my parents didn't have the same loan for the 40 years they
owned the house.
point to this story is; you need to know what you are REALLY
getting when someone tells you they have the lowest rates.
The fact is we all have the same rates because the all come
from the same source, the Bond Market.
rate you can expect on your loan is totallly dependent on
the perceived risk on you individual loan package.
rates typically quoted by lenders are for "A"
paper or "Market rates". ( Which means a high
quality loan package that is able to meet the standards
of the government backed agencies that we call "Fannie
Mae" and "Freddie Mac", because that is where
80% of the money for Mortgages comes from.) These agencies
sell "Mortgage Backed Securities" (MBS's) on
the "Bond" market. These are traded like
any other "Bond" and compete with Stocks and other
Bonds for investors money. All rates are quoted "subject
to change". Translation: they change constantly.
they change constantly, I always quote rates as a range
until you "lock-in". When you "lock-in",
the "Servicing Lender" I am selling your loan
to, goes to an agency and "buys" the money for
your loan at that moment.
problem with quoting rates online is that they are constantly
changing and I have yet to find a site that honestly gives
a "real market" update on a moment by moment basis.
The typical "Quote" is the current available rate
with some amount of points added to make it look better.
other thing that is valuable to remember is that all lenders
"go to the same well for water". In other words
we all have the same rates available. Therefore, the real
difference in rates between all lenders is extremely small
ask: "What is the difference?"
The difference is in the amount you pay up front in closing
costs. If you pay points you get a lower rate. If you pay
lower closing costs you get a higher rate.
This is one of "the games lenders play". (
more on games )
real difference between lenders is the service you get.
What you want is someone who will explain all of the variations
possible. Someone who will help you select the the loan
program and fee structure to best fits your individual
needs and ability to qualify. With literally hundreds of
programs and rate/fee structures available, the best way
to select a lender is to find someone willing to take the
time to help you properly. There is no "one-size-fits-all"
for someone that looks or feels right to you and has the
ability to help, even if your credit is a little bruised.
In today's market there are many ways to get a mortgage.
If your loan file isn't perfect, that's when the real shopping
with getting a credit report. In today's world credit is
the most important item in determining if you can even qualify
for "A" paper or a "Market Rate" loan.
If your credit is less than perfect, it may still be able
to be fixed
so that you can qualify for "A" paper.
If not, the rates will be higher on your loan.
OK, so enough rhetoric. Here's the only place I've found
where you can go for an honest quote ( "right from
the horses mouth", Freddie Mac )They are not trying
to sell you anything, just
compiling data. This quote is the national weekly average
of the rate and points charged by lendersacross the country.
It may not be perfect, but it is enough to keep your lender
you again for visiting,