are sensitive to inflation fears. When available money outweighs available
goods or services, inflation occurs. The Federal Reserve Board may then
increase the prime lending rate to slow inflation; lending institutions
usually follow suit.
The annual percentage
rate reflects the cost of your mortgage loan as a yearly rate. It also
incorporates the fees incurred to obtain the loan, such as discount
points and loan origination fee.
Once you apply, locking
your interest rate guarantees that you will receive that rate as long
as you close within a set period of time (30, 45, 60 or 90 days). Floating
your rate is not choosing to lock your interest rate when you apply.
Interest rates can increase or decrease between the time you apply and
the time you close your loan.
loan rates working together, how you ask? There is an inverse relationship
between the interest rate and points charged on a loan: You can choose
to lower your interest rate by paying additional points; conversely,
you can choose to pay fewer points in exchange for a higher interest
The basic idea of points is to pay a little up front in order to save
big over the life of the loan. Each discount point you pay will typically
lower your loan's rate by .25%. Points are a good idea if you plan to
hold onto your home for a long period of time. This allows you to offset
the costs of paying for the points.
costs will include expenses such as points, taxes, appraisal, credit
report, title insurance, mortgage insurance and attorneys' fees. You
will receive more specific information about types and amounts of closing
costs applicable to your transaction and the state where your property
is located when you apply for a loan.
Continue reading for more information on "Mortgage
Loans" that you will need to know about in order to be
better prepared for a California Mortgage Loan!
Use our quote
form, a mortgage feature on California Mortgage & Home Equity
Loans, Co. to locate a lender in your area offering the mortgage
product that best suits your needs. The independent lender you select
will work with you to help find a low-cost mortgage that meets your
needs. Apply today!