Mortgage Fearbuster 12

Posted by  on Apr 26, 2010

Q: We're shopping for a home, and notice that mortgage quotes can vary considerably even with the same mortgage rate. What gives?

A: Presuming that the mortgage loan amounts and fixed mortgage rates are the same for all of your quotes, the difference is caused by variances in lender fees and estimated closing costs. You'll need to compare these charges and costs line by line to see where the difference occurs. Feel free to ask questions and negotiate with prospective mortgage lenders, as some fees and costs may be flexible.

Q: We've just found a great condo, and can qualify for the best mortgage rates due to our credit scores. The problem is that I'll be finishing grad school next year, and we may be moving depending on how my career goes. I think we should go for an ARM to get the lowest possible rates. My other half says we should just get a fixed rate mortgage at today's low mortgage rates. What should we do?

A: If you need a little extra breathing room, an ARM can provide a low payment for a few years. ARM loans can vary in their terms and conditions, and if you're thinking about paying off an ARM early through selling your home , be very careful not to take out a loan with a prepayment penalty. Fixed rate mortgages are available at near historic lows, so if you want the security of a stable payment, this is a great time to lock in a low mortgage rate.


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