There are a host of mortgage rates available in the US. The rates are different for different states and can be obtained for different cities and towns in each state online. Typically mortgage rates move with market trends. Mortgage rates have been marginally worse after jobless claims data was published. Lender rate sheets were slightly worse but nothing monumental. The rates rally up with news of weak housing data. Typically mortgage rates fluctuate with the movement of market prices for mortgage-backed securities.

To compare mortgage rates available can be a nightmare. There are a host of online options available that provide quotes on mortgage rate and comparative indicators for states, cities and towns. Most lenders update their rates every day. Typically online loan calculators can be the best option if you choose to determine and compare available rates in your state. However comparing rates on loans of different lenders can be the most difficult part of mortgage shopping. Firstly, it is important to keep in mind that mortgage packages consist of more than interest rates. They consist of a quoted rate, points and closing costs. Points are an up-front fee paid to the lender at closing. Each point equals one percent of the loan amount. Points are charged, or paid, to lower or increase the rate on the loan. Most lenders will allow you to choose amongst a variety of rate and point combinations for the same loan product. Therefore, when comparing rates of different lenders, you may like to make sure that you compare also the associated points. Closing costs typically consist of loan related fees, title and escrow charges, government recording and transfer charges and can add thousands of dollars to the cost of your loan. When comparing lenders it may be important to compare loan related fees (i.e. the fees which lenders charge to process, approve and make the mortgage loan), since the other fees are typically independent of the lender. Secondly, when comparing loans of different lenders you may need to thoroughly investigate and compare all loan features: maximum LTV, mortgage insurance payments (if any), credit and cash reserve requirements, qualifying ratios, etc. It is advisable that you pay special attention to the presence of prepayment penalties and the availability and terms of conversion options (such as rate reduction option, or option to convert an ARM to a fixed-rate mortgage). Thirdly, for each loan you are comparing you may like to find out the lock-in period, during which the interest rate and points quoted to you will be guaranteed. Lock-ins of 30, 45 and 60 days are common. Some lenders may offer a lock-in for only a short period of time (15 days, for example). Usually, the longer the lock-in period is, the higher the price of loan. The lock-in period should be long enough to allow for settlement before lock-in expires. Finally, it is advisable that you make sure that you are comparing the interest rates on the same day. Rates change daily, if not a couple of times a day.

It may be important to compare mortgage rate finance options available from various lenders. To compare loan products of the same type among different lenders, you may need to first fix all lenders at one interest rate and lock-in period. You may then like to compare different lenders on the same rate (e.g. 6.5%) and lock-in period; otherwise you will be comparing apples and oranges. Most lenders can offer you a variety of rate and point combinations for the same loan product and allow you to choose the lock-in period. Second, you can add up the total lender fees for that rate including points and loan related fees. There are a number of different fees paid in connection with loan, and some lenders have different names for them. One lender might offer to waive one fee and then add another one. So when comparing loans of different lenders you may like to look at the total sum of ALL loan related fees. These fees can include processing and underwriting fee, mortgage insurance premium, appraisal fee, the cost of a credit report, tax service fee, application, commitment, wire transfer fee, etc. Points can include discount and origination points and have to be converted into dollar amounts. This may finally enable you to establish that the lender that has lower lender fees has a cheaper loan than the lender with higher fees.

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Category: Finances
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