Mortgage Rates

Mortgage Rates
One of​ the​ most common things that borrowers ask lenders is​ what their rates will be .​
The rates a​ lender has is​ very volatile,​ it​ is​ not always the​ same .​
So the​ lender will always have to​ wait via fax,​ E-mail or​ a​ secure website for the​ rate sheet that comes from their company .​
Because it​ is​ volatile the​ rates could even change 5 times in​ one day .​
As a​ borrower you​ have no right to​ see the​ rate sheet,​ this is​ basically the​ advantage or​ a​ way for the​ lenders to​ do the​ business .​
The rate sheet will always show the​ interest rates and the​ cost expressed in​ points .​
a​ point is​ equal to​ one percent of​ the​ loan.
The cost of​ the​ rate usually vary depending on​ the​ interest rates,​ higher rates are cheaper compared to​ lower rates .​
This is​ done because it​ helps the​ lender to​ earn more over the​ interest for the​ period of​ the​ loan,​ so lenders charge less cost .​
When customers want a​ lower interest rate,​ they are charged with higher cost because lenders will earn fewer in​ the​ longer period of​ the​ loan.
The point system would usually work in​ this way: Zero points mean par value or​ pricing .​
The numbers in​ parenthesis means premium or​ rebate .​
Premium or​ rebate means that the​ money is​ paid back to​ the​ loan officer or​ where the​ loan originated at​ a​ rate instead of​ having a​ cost .​
The loan officers are paid by commission .​
The earnings of​ the​ loan officer and the​ branch are split between them .​
The fees that are not subject to​ the​ points are not split up and instead directly go to​ the​ branch .​
Before giving you​ his quotation price,​ the​ lender will add on​ the​ profit he and his branch would like to​ make .​
Don’t worry however as​ there limits are set by the​ company as​ how high or​ much he or​ she can add to​ his cost .​
For the​ lender,​ he or​ she should not worry about the​ limitations because between the​ minimum and maximum there is​ a​ great deal of​ flexibility.
An example of​ this situation is​ when the​ loan officer wants to​ earn 1 point .​
When he gives you​ the​ quotation,​ it​ will already include the​ one point to​ the​ cost of​ the​ loan .​
So if​ the​ lender has 7.125% of​ interest rate,​ the​ lender will earn 1 point and have some left over money .​
The left over money is​ then used to​ pay the​ processing fees and the​ documents .​
More informations are available at​
Mortgage Rates Mortgage Rates Reviewed by Henda Yesti on July 03, 2018 Rating: 5

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