Decide what your goals are for your home purchase and whether you need a fixed or adjustable interest rate. A fixed interest rate means that the rate stays the same throughout the life of the loan. An adjustable rate starts off lower and then increases gradually, usually annually, but not beyond a maximum amount. Try our APM loan calculator to help you compare the two types and decide what might work for you.
Get familiar with loan terminology. We’ve made it easy for you by including a Glossary of Mortgage Terms at the end of this post!
Talk to trusted family or friends about what types of home loans they have had and what their experiences were with each type of loan to get a better idea of what might work well for your situation.
Congratulations on taking the extra step to educate yourself on home loan interest rates and how to compare them! American Pacific Mortgage is happy to give you the tools and information you need to make wise choices during your homebuying journey. Got questions? One of our friendly loan advisors can help answer any further questions you have as you learn more about this process – call or click today.
Annual Percentage Rate (APR): The cost of credit, expressed as a yearly rate including interest, mortgage insurance, and loan origination fees. This allows the buyer to compare loans, however APR should not be confused with the actual note rate.
Appraisal Fee: Fee charged for receiving a written analysis prepared by a qualified appraiser and estimating the value of a property.
Closing Costs: These are expenses, over and above the price of the property, that are incurred by buyers and sellers when transferring ownership of a property. Closing costs normally include an origination fee, property taxes, charges for title insurance and escrow costs, appraisal fees, etc. Closing costs will vary according to the area of the country and the lenders used.
Initial Interest Rate: This refers to the original interest rate of the mortgage at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). It’s also known as a “start rate” or “teaser.”
Lender Fees: Fees charged by a bank or lender in order to process and fund a loan. These include multiple fees such as underwriting fees, appraisal fees, processing fees, and more.
Loan Term: The amount of time that the borrower will make monthly payments on the loan.
Origination Fee: A fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point is one percent of the mortgage amount.
Points: A point is equal to one percent of the principal amount of your mortgage. For example, if you get a mortgage for $165,000, one point means $1,650 to the lender. Points usually are collected at closing and may be paid by the borrower or the home seller, or may be split between them.
Specialty Loan Programs: APM offers a multitude of innovative home loan programs to serve your unique mortgage needs.
Title Services Fee: Fees charged by the title company in order to record the loan. These include title insurance fees, recording fees, endorsement fees, and more.