Mortgage Interest Rates, Demystified!

Mortgage interest rates for every mortgage lender, bank, or credit union follow the same index to set rates, the 10 year treasury bond.

So if everybody’s following the same index, how come you see so many different rates?

Here are the main factors impacting mortgage rates:

Credit score
Down payment
Occupancy (ex. owner vs. non-owner)
Loan program (ex. FHA, Conventional, Jumbo)
Property type (ex. condo)
Lender overhead
Fees or credits:
Discount points
Origination points
Lender credits

BEWARE! Some lenders take the car dealer approach to showing rates. List the rate with lots of money down (30%+), have the highest credit score, owner occupied, conventional loan program, and hide fees in the fine print. Fees such as discount points and origination points, all which are hard costs to you.

This makes the rate look great but is it realistic for you?

5 Steps to protect yourself from these deceptive tactics and get the LOWEST Rate:

Read the fine print carefully - scroll all the way to the bottom.
Ask for the “par” rate. That’s the rate closest to not paying discount points to lower the rate and not getting a lender credit to offset fees.
Ask if they lender charges an origination fee (typically 1%, if they do charge).
Ask to see the rate table or quote from their computer screen. They should be able to email you the rates and discuss them fairly openly with you.
Compare the Annual Percentage Rates (APR). This adds in some fees and helps you to compare lender to lender a bit better.

Remember however rates aren’t “locked in” until you’re under contract and are subject to change. So be mindful until you lock in the rate.

Take action and CHAT with us now to ensure you get the BEST possible rate .

We’re always happy to help answer questions or provide other options.

Stephanie & David Cramm
(303) 931-6776