Rate Watch

Lenders provide a great deal of guidance, but you make the final decision about whether you’re getting the best loan you can get. Part of taking that responsibility involves comparing interest rates. Mortgage interest rates change daily based on a number of national and international economic factors.

COMPARING MORTGAGES

When you are comparing different mortgages, do your best to be sure that you’re taking into account all the factors that can influence your final costs. The lowest mortgage rate may not necessarily be the best choice. Ask lenders these questions:

  • What are costs for origination fees?

  • What are the costs for discount and origination points?

  • What fees does your rate quote include?

  • What is the annual percentage rate (APR) of the loan?

The Annual Percentage Rate (APR) is computed based on all the major costs of your loan, not just the loan amount. It usually includes points, origination fees, and other costs associated with the processing of your loan. Be sure to ask lenders which fees are included in their APRs, and try to compare APRs that include the same fees. This will help you determine the most accurate rate you would actually pay.