Comparing Mortgages from Different Lenders
Posted on August 9, 2009 - Filed Under mortgage | Leave a Comment
In today’s housing market, many hopeful buyers are looking to purchase homes while prices are still at record lows. Though despite the low housing prices and bargain mortgage rates currently available, many aspiring homeowners are having difficulty choosing the right mortgage.
Picking out and comparing the finer points of each mortgage can be one of the most difficult aspects of getting a home loan. There are more to mortgages than just interest rates. There are also points, fees, and closing costs to consider. Lenders such as Bank of America and Quicken Loans will usually give you a variety of different rate and point options for the same loan. Points are used to “buy down” your interest rate, with each point representing one percent of the total loan amount. If you choose to buy points, the money is due in cash at closing time.
The lock-in period for each mortgage should also be considered. The lock-in period is the amount of time for which the rate and points quoted are guaranteed. This is usually either 30, 45, or 60 days, with higher loan fees applicable applied for longer lock-in periods.
Other features to compare include the maximum loan to value ratio each lender offers, whether or not you must pay mortgage insurance, the qualifying income to debt ratio of each lender, and whether any prepayment penalties exist for each mortgage.
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