When obtaining a home loan, you’ll receive two important documents from your lender: a loan estimate and a closing disclosure. On the surface, these documents are very similar, but they both serve different purposes. Here’s what you need to know about the differences between these two forms and what each means for you:
4 Frequently Asked Questions about Missouri Mortgage Rates
A homebuyer will ask lenders all kinds of questions about Missouri mortgage rates throughout their loan process. The ultimate goal for borrowers is to save money and obtain affordable financing. The following will provide answers to some of the most frequent consumer inquiries about Missouri mortgage rates.
What’s your rate?
This is by far the most generally asked question because homebuyers want to know they are getting the best deal possible.
- Ask your lender what rates are available and if there will be a shift downward anytime soon.
- Supply the lender with adequate information and documentation in order to receive an accurate quote.
- Understand there are numerous factors can affect the quote you receive from your lender: financial and credit history, type of program, value of the property, and the condition of the real estate market.
- External influences such as inflation and job growth can also impact the amount you will pay.
Should I lock in or float down?
It’s almost impossible to predict how the market will fluctuate week-to-week, day-to-day and sometimes even hour-to-hour.
- If rates are trending upward, you may want to think about locking in as soon as possible.
- Make sure you will be able to close your loan within the lock period before making any decision.
- Be aware of your estimated closing date so you are able to determine the best lock period.
- If you think rates may drop during processing, you may want to “float down” or lock in a second rate.
- Floating can be a risky plan because rates can rise during this time as well.
- Always ask your lender about their policies and current trends.
What is APR?
The Annual Percentage Rate is a more precise representation of the true cost of the loan.
- It is calculated by distributing the fees over the life of the loan.
- The APR of mortgage interest will generally be higher than the initial figure because it includes some of the fees associated with handling the loan.
- Additional expenses which factor into the APR such as insurance, discounts, origination charges, prepaid interest and other credit costs.
- Be cautious. Advertising can be deceiving since lenders do not always include all expenses into the annual percentage.
- Shop to a point. Some customers will base their search for financing solely on APR. They will come to find that inconsistent advertisements can create a situation that leads to comparing apples to oranges.
Can you explain more about my loan terms?
After inquiring about Missouri mortgage rates, borrowers will typically start to request information of other aspects of their financing situation. A good specialist will provide answers to all of the following questions.
- What financing program are you using?
- Are there prepayment penalties if you decide to make extra payments throughout the year?
- Is this a fixed or adjustable rate and how long is the term?
- What are the closing costs?
- When can you expect to close?
- How much money will you need for a down payment?
For more information on Missouri mortgage rates, submit a quick contact form and a Cornerstone representative will be in touch with you shortly. Cornerstone’s professionals have an average of 15+ years of experience in the mortgage industry and are ready to help you finance your dream home today.
The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.