Find The Lowest Mortgage Rates
How can I get the lowest mortgage rate?
This is a very important question. The biggest mistake that most borrowers make is that they insist on a "no points" loan. Borrowers will often call a lender and specifically ask for a "no points
mortgage loan," without even realizing that this also means: "Give me a higher
mortgage interest rate."
However, there are times when it is appropriate to choose a mortgage "without points" and a
take higher rate...read on.
As a general rule of thumb: If you intend on staying in your house for at least five years (and perhaps forever), you should pay the higher closing costs (the point) and you will make up for it with the lower interest rate. In other words, if you pay an extra $3000 in closing costs, but you save an additional $60 per month, you will break even in 50 months! Every month after that, you will have saved an additional $60 per month because you were smart enough to pay the extra fees- the points- in the beginning. You essentially bought down your rate.
On the other hand, if you were to sell that very same house after living there for only two years, paying that point was a costly mistake.
Bottom line: Pay "points" if you are going to stay in the house for a while- it only makes sense. If you would like to see a "break even" mortgage calculator - go here.
Click on a mortgage type below!
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