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Mortgage Rates FAQs

Mortgage Rates

Home Mortgage rates change daily.  Depending how volatile the stock and bond market are for the day can have a significant influence on how many times the mortgage rates change on a given day.  This can play a big factor on getting the lowest mortgage rates for buying a home or refinancing your home.  For instance, there could be a difference of 0.25% in interest rates from morning to afternoon.

Yes.  Home equity loan rates are most often tied to the prime rate and depending on market conditions can be lower or higher than 30 year fixed mortgage rates.  Also, home equity loan rates are typically adjustable rates that fluctuate monthly.  If you are looking for home equity loan rates that are fixed, chances are that the rate will always be higher than a traditional first lien fixed mortgage.  When it comes to home equity loans, your best bet is to deal directly with a local bank as they offer the best no closing cost options for consumers that also bank with them.

Shahram Sondi   July 2, 2016  


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No. Mortgage brokers receive wholesale home financing interest rates and thus result in passing on the savings to you as a first time home buyer. The concept is simple: Mortgage brokers have lower wholesale rates and banks are prices higher because they are retail with higher overheads/costs. That being said, it is still important that you shop with multiple local mortgage brokers to obtain the best home financing rates.

Shahram Sondi   July 2, 2016  


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No. Jumbo mortgage rates are typically higher than a Fannie Mae traditional mortgage rate.  The primary reason for the increase in rate for a jumbo loan is the size of the loan and thus, results in higher risk exposure for the mortgage lender.  For example, the bank has less risk when they spread $1,000,000 over five loans than they do offering a single million-dollar loan. Simply put, it's just like the risk associated with putting all your eggs in one basket. As a result, the higher the risk the bank takes, the higher the rate.

Lastly, not all jumbo lenders are equal. Some mortgage companies keep their primary focus on jumbo loans and thus price themselves more aggressive than national banks.

Shahram Sondi   July 2, 2016  


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Mortgage refinance rates are pretty close to purchase mortgage rates.  Although there are times that mortgage companies will offer pricing specials for people getting a mortgage to purchase a home. The only time that you will find the refinance rates to be significantly higher than purchase mortgage rates is if you are looking at a debt-consolidation mortgage loan or a cash-out refinance loan. If you are looking at a straight rate/term refinance the rates are going to be close.

Shahram Sondi   July 2, 2016  


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Second-home rates are slightly higher than owner-occupied rates.  However, the required down-payment for second homes is higher and directly affect the interest rates you are offered.  The higher the down-payment the lower your second home mortgage rate.  If you are researching for best rates online, know that FHA loans are not qualified for purchasing a second home. So, be sure to look for conventional rates online and not FHA rates.

To get the best second home mortgage rates you would need to put at least 20% down-payment and have a minimum credit score of 760.

Shahram Sondi   July 2, 2016  


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No. First time home buyers receive the same mortgage rates as someone that previously owned a home.  Mortgage rates for first time home buyers vary depending on credit and percentage of down-payment.  The better the credit score typically results in lower mortgage rates.

First time home buyers are often advised by housing counselors to work with a local mortgage broker due to the personal attention and accessibility to multiple home financing programs.  Most importantly, first time home buyers need to remember that mortgage rates fluctuate daily. So, when shopping for mortgage rates and from the time you are prequalified to the time you find a home to buy, the rates could have gone up by 1% or more and thus result in higher mortgage payments than initially budgeted for.

Shahram Sondi   July 2, 2016  


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Home mortgage rates vary from state to state.  For instance, certain states receive incentives from the government to make home ownership more affordable and thus provide lower rates.  On the other hand, jumbo home mortgage rates in states such as California with higher home values are lower than states like Florida where the average home price is almost a third of California. Another great example is home mortgage rates for HARP loans.  Depending how hard your state was affected during the housing crash, states like Florida give borrowers an extra credit toward the mortgage rates for homes that are underwater.

Shahram Sondi   July 2, 2016  


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In my opinion, it has nothing to do with getting the best mortgage rates.  When consumers are searching the internet to learn about current mortgage rates, they should be more specific on what type of mortgage rates they are shopping for.  For instance, if you are looking for interest rates for purchasing an investment property in Florida, you shouldn’t Google the term “bank rate” or “bank rates”.  You should instead search for the specific term like “lowest investment property mortgage rates in Florida”.  This helps narrow down your search and receive the best search results from Google.  You can take your search for best mortgage rates even further by including the city that you plan on buying the investment property in; as this helps you contact a local mortgage broker that has a better understanding of your area.

Shahram Sondi   July 2, 2016  


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To the get the most accurate mortgage interest rates today you will need to speak directly with a mortgage broker or a bank/lender loan originator.  This is the only way because all the rates you see online are general and do not take into account the specifics of your scenario.

For instance, most online mortgage rates assume the best possible case scenario when displaying their interest rates. By speaking directly with a mortgage originator, they will be required by law to provide you an accurate good faith estimate with a good through rate lock period.  As a result, it help to shop and compare the good faith estimate of at least three different mortgage companies on the same day to determine what really is the best mortgage interest rates today.

Shahram Sondi   July 2, 2016  


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Whether to refinance your mortgage or not all depends on your short term and long term goals.  For instance, the general rule of at least 1% to 2% reduction compared to your current mortgage rate is irrelevant if you are switching from a 30 year fixed to a 15 year fixed mortgage since you will have significant savings in reducing the term of the mortgage regardless of the rate.

However, if you are refinancing and staying in a 30 year fixed mortgage then the easiest calculation would be how much are the closing costs associated with the refinance and how fast will you recuperate the costs associated with the refinancing.  Generally, if you can recover the costs within 2 to 3 years then it makes sense as long as you plan on staying in the home long term.

There are so many different angles to look at when refinancing your mortgage and the best advise I can provide you is, take your time and work with a local mortgage broker or originator that will take the time and help you explore all the pros and cons of refinancing your mortgage.

You need to take a financial planners approach in what best fits your particular situation.

Shahram Sondi   July 21, 2016  


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Whether to pay discount points or not depends on your long term goals for the mortgage that you are obtaining.  For instance, if you are planning on retiring and living on a fix income then you might benefit from having a lower monthly payment by paying discount points.  However, most consumers do not keep a mortgage for the entire term and thus, end up wasting their money due to the time it takes to recuperate the cost associated with paying discount points.  A good rule of thumb is to determine if the monthly savings associated with points can be recuperated within a three year time frame.

Shahram Sondi   January 4, 2017  


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Home financing programs in Florida range from FHA loans, VA loans, USDA loans,Jumbo loans and conventional loans. The minimum qualifying requirements vary from mortgage lender to lender depending on your credit profile and income. Depending on your income level, some first time home buyers also have the ability to take advantage of the Florida down payment assistance programs in combination with the above mentioned home financing programs to secure a home for their families.

Shahram Sondi   July 2, 2016  


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Determining what is a good interest rate on a home loan depends on your credit scores and whether or not you want the loan with the lowest closing costs or the lowest rate.  It is important to speak to a local mortgage broker that will take the time to analyze your short and long term goals for the home loan that you are applying for.  Typically, if you are planning on keeping a mortgage short term that it makes more sense to take an interest rate that has little or no closing costs associated with it.

Shahram Sondi   January 5, 2017  


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An amortization table only helps to determine how much of your monthly mortgage payment goes towards principal and interest each month based on the life of your loan.  To determine the true cost of your loan, you really need to look at the finance charge disclosed on the Truth-in-Lending disclosure statement provided to you by the mortgage company.

Remember, banks are not lending money for free and when you factor the time value of money/inflation over a 30 year mortgage, you are always going to pay a lot in finance charges so don’t freak out. The best use of an amortization table in my opinion is to determine what your loan balance will be at a particular year if you plan on selling your home.

Shahram Sondi   July 2, 2016  


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The APR on a mortgage is the true cost of a loan.  your mortgage payment is based on your note rate that is always lower that the APR.  For instance, if there are no discount points associated with a mortgage rate than the APR will be very close to the note rate.  However, if you are paying discount points than the gap between the note rate and the APR increases depending on the number of discount points or origination fees associated with the instant rate.  A lot of online advertisements focus consumers attention on the note rate rather than the APR.  Consumers should pay particular attention to the fine prints when shopping for the lowest APR/mortgage rates.

Shahram Sondi   January 5, 2017  


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Interest rates on home loans vary by loan type such as FHA loans, VA loans or conventional loans, credit scores, and whether it is a purchase transaction or to refinance with or without cash-out.  Rates change daily and depend on various closing cost options such as paying discount points or getting a no closing cost mortgage.  Typically, local mortgage brokers have the ability to undercut the big banks and online lenders by offering consumers with wholesale rates without charging origination fees.

Shahram Sondi   January 5, 2017  


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