Banks advertise their mortgage interest rates all the time. It goes without saying that they want to advertise the lowest rate possible, but that does not mean that you will qualify for that low rate. So, picture that you understand the difference between the actual rate their advertised rates.
Banks advertiser rates all over the TV, radio, and Internet. Many times they will advertise what is called a buydown rate versus what the actual rate is. I buydown rate typically includes the borrower to bring in thousands of dollars to buy down the rate.
The basic thing to understand is that mortgage interest rates come from the same place for each bank across the nation. Some banks are more aggressive without rate that they get, but advertising is advertising and you really need to make sure that you read the fine print.
What kind of fees are you going to be charged? This is one question that you need ask up front. If the fees are going to outweigh the savings, then it goes to reason that refinancing your mortgage is probably not advantageous at this time. Typically these closing costs should be able to be recouped within 2 to 3 years of refinancing.
Make sure you know your credit scores. Your credit score is very important in determining what type of interest rate you are going to get with your mortgage. This will also determine whether you can go with conventional financing or you may have to go with an FHA loan.
Do you need a fixed rate mortgage or an adjustable rate mortgage? This is one question you need to ask your mortgage officer. If they are experienced they will be able to walk you through the pros and cons of adjustable rate mortgages and fixed mortgages based on your particular situation. Everybody situation is a bit different.
Make sure you check and see if there is a prepayment penalty on this loan.
The most important step of getting a new mortgage is to make sure that you’re working with someone who knows what they’re talking about. It goes without saying that in any industry there are the people that are great at the job, and there are people that are clueless. Believe me, I have worked with both
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