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Should You Be Informed About Mortgage Trends?

Whether you’re a homeowner looking to refinance and save money, or you’re buying a new home, staying up to date on mortgage trends is important.  It can be all too tempting to hear extremely low rates on television, or see them on the Web.  But before you sign or click anything, it’s best to do a mortgage loan comparison. Here’s what you should know about today’s rates.

Rates Differ by State

Depending on where you live, you may qualify for a different mortgage rate. Some websites allow you to compare rates between local banks and online banks.  Don’t be surprised if you notice a significant difference between the two as lenders and banks can vary the number of points you need to pay.  Look for one that can offer you a rate lock guarantee for a set number of days.  This gives you a month or more to get your paperwork in order before you have to close, without having to worry that your rate will increase.  And you can find out all about the latest mortgage trends in your area online – many websites let you easily do a mortgage loan comparison using your ZIP code. It’s that simple.

Rates Differ by Product

Different types of loans mean different mortgage rates and terms.  For example, an adjustable rate mortgage (ARM) may have a lower interest rate than the very common and very popular 30 year fixed rate mortgage.   There are also other types of mortgage products available.  Fortunately, the best mortgage lenders have helpful calculators on their websites which can show you the potential difference in savings.  You can even look to sites managed by government agencies like the Federal Reserve Bank for help and information.  If you’re not sure whether an ARM or a fixed rate mortgage is right for your situation, try experimenting with different scenarios via an online mortgage calculator.

By using an online calculator, you may also be able to see what you’d save in interest by making one extra payment or more over the course of a year, or by making pre-payments.  Keep in mind though, as with any online tool, the numbers you get online are estimates, and it’s best to talk with a home loan consultant before you sign any paperwork.  An experienced home loan consultant can take a closer look at your finances, credit report and home ownership details to help you find the loan product that’s right for your unique needs.

Stop the Rate Chasing

The most important thing to remember is to be careful when chasing small rate differences.  Go for a lower rate if you can see substantial savings, but the mortgage process can be costly and time consuming.  Be sure of all the terms and costs before you make a change, whether you’re in the application process or looking to refinance.    Keep in mind that if you’re considering refinancing, you have a little more in terms of flexibility when it comes to getting the best possible rate for your needs.  Here again, however, be sure you are clear about all the included costs and fees.  It’s not a decision to make lightly, but if you can use an online calculator to determine your savings and speak with a home loan consultant to verify how much you’ll save, it may be worth taking the plunge.

The final word in mortgage rates is to keep in mind that savvy homeowners stay informed about mortgage rate changes.  It’s best to find a bank you know and trust, with decades of experience helping people discover the dream of home ownership, than to skip from lender to lender.

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