Mortgage Facts that You Need to Know

You have to know every detail of a mortgage, especially if you’re thinking of getting a house. One of the reasons why some homeowners were heavily in debt is because they weren’t aware of the terms of their own mortgage loans. You can stop this from happening if you take a look at these important facts about a mortgage.

Fact 1: APR Measures Mortgage Costs

APR or Annual Percentage rate gives you a better estimate for all your costs in comparison with the other lenders. Your mortgage loan isn’t only consisted of your mortgage rate. It does have other charges alongside with it, including the interest, origination fees, and closing costs. APR helps you determine which lenders are offering a much lower rate than the others. However, most lenders that offer lower rates actually charge a much higher APR once you include the fees.

Fact 2: Mortgage Rates aren’t Stable

Georgia Mortgage rates can vary from time to time. Most homeowners mistakenly think that mortgage rates are stable, causing them to lax a bit. The mortgage rate is the same with how the stocks, bonds, and other financial investment moves. It continues to fluctuate, depending on the economy’s state. So the quote that you receive earlier may not be the same rate that you will get in the next couple of days. You can only prevent any sudden change from happening if you request for the assessed mortgage rate to be locked in by your lender.

Fact 3: All Lenders Charge Differently

All lending companies in different cities, like Atlanta, have their own way of assessing rates and fees. Although federal regulators have been trying to standardize the procedure for getting loans, there aren’t any regulations made that require lenders to offer the same mortgage rates. This, in turn, is very subject to abuse and misuse. Lenders also have the freedom to state their preferred amount on the related services that they offer like appraisals, title insurance, and even credit checks. You have to list down all the basic things that you know from a lender and compare it with the others within you area. This will help you get some information on who offers the best rates.

Fact 4: Refinancing can still be an Option Even if you’re Financially in Debt

Financial crisis can hit anyone, even if they’re already financially secured. Homeowners who find themselves in this situation can lower their interest rates when they refinance their mortgage. The Home Affordable Refinancing Program or FHA is provided by the federal government to assists homeowners with their existing mortgage through refinancing. However, the rules still depend on whether your loan is funded by either Freddie Mac, the Federal Housing Administration, or even by Fannie Mae.