King bell
VIP Contributor
If you're shopping for a mortgage, it's important to understand the fine print on any offers you receive. Here are some tips to help you figure out what to look for:
1. Interest rates: Be sure to compare both the interest rate and the annual percentage rate (APR) when considering mortgage offers. The APR includes the interest rate plus any additional fees, so it can give you a better sense of the true cost of the loan.
2. Loan terms: The length of the loan (usually 30 years) will affect both your monthly payments and the total amount of interest you pay over the life of the loan. Some lenders may offer shorter terms, which can save you money in interest but may also mean higher monthly payments.
3. Pre-payment penalties: Some lenders may charge a penalty if you pay off your loan early. This is usually a percentage of the loan amount, so be sure to factor it into your decision.
4. Points: Some lenders may offer so-called "points" as an incentive to choose their loan. These are basically upfront fees that you pay, and they can lower your interest rate or monthly payments. But be sure to compare the total cost of the loan with and without points before making a decision.
5. Private mortgage insurance (PMI): If you make a down payment of less than 20%, you may be required to pay for private mortgage insurance. This is an additional insurance policy that protects the lender in case you default on the loan.
By understanding the fine print on mortgage offers, you can be sure you're getting the best deal possible.
1. Interest rates: Be sure to compare both the interest rate and the annual percentage rate (APR) when considering mortgage offers. The APR includes the interest rate plus any additional fees, so it can give you a better sense of the true cost of the loan.
2. Loan terms: The length of the loan (usually 30 years) will affect both your monthly payments and the total amount of interest you pay over the life of the loan. Some lenders may offer shorter terms, which can save you money in interest but may also mean higher monthly payments.
3. Pre-payment penalties: Some lenders may charge a penalty if you pay off your loan early. This is usually a percentage of the loan amount, so be sure to factor it into your decision.
4. Points: Some lenders may offer so-called "points" as an incentive to choose their loan. These are basically upfront fees that you pay, and they can lower your interest rate or monthly payments. But be sure to compare the total cost of the loan with and without points before making a decision.
5. Private mortgage insurance (PMI): If you make a down payment of less than 20%, you may be required to pay for private mortgage insurance. This is an additional insurance policy that protects the lender in case you default on the loan.
By understanding the fine print on mortgage offers, you can be sure you're getting the best deal possible.
