Newspaper Mortgage Rates
Look at your local newspaper and you will likely find a listing of local mortgage rates. You will likely find that the rates quoted vary quite a bit from lender to lender. Why is that? Well, some lenders will quote a rate with no points, some with one point, some with 2 points, etc. Or, some quote rates with a certain minimum loan size, credit rating, etc. So, be careful and read all the fine print.
Most importantly, remember that the only rate that is meaningful to you is the rate for the loan you can actually qualify for. Your mortgage professional will gather all your information, research lenders, and only then provide you with a meaningful rate quote.
Be aware, many publicly posted, or advertised rates are bait and switch
schemes. If the rate looks too good to be true, investigate thoroughly. The old adage applies. If it looks to good to be true, it probably is.
Many rates that are posted in newspapers, on tv, on the radio, in flyers or direct mail, and on websites (especially this one) are not updated very often. Since rates change daily and all throughout the day it can be very hard to compare rates from one lender to another. This is why all mortgage rate shopping should be done on the same day as closely to each other as possible. When you are getting ready to obtain a mortgage or shop for a mortgage be prepared and make a list of a couple of companies you would like to compare from and then contact them to see what is available for you.
The annual percentage rate or APR will reflect a higher interest rate because of fees and costs. The APR is the total yearly cost of a mortgage which will include the base interest rate, loan origination and mortgage insurance.
The unfortunate fact of the matter is this. Rates that are listed in newspapers as well as on the internet, billboards and other advertising are often
purposely posted lower than the lenders knows he can deliver. Since rates change so often there is almost no chance that a rate you see advertised will be the rate you get. Another fact is this: rates do not vary that much from one lender to the next. It is wise to choose your lender in the same manner that you would choose a doctor or other professional. Do you choose your doctor based on his rates? Choose on the basis of professionalism, integrity, competence, experience, etc. Doing this will insure that you wind up with a
competitive rate and a pleasant, professional borrowing experience.
Always read the fine print. Many times the newspaper rates will include certain loan to value (LTV) restrictions and even discount points paid.
Just because an interest rate is advertised on newspapers does not mean that every home buyer can get it. Interest rates are influenced by many factors. The number of days the advertised rate can be locked for is one of those factors. As a general rule, the longer a home buyer can lock a rate for, the higher the interest rate. If the low advertised rate can only be locked for 7 or 15 days, it would not do the home buyer any good, since it is highly unlikely that anyone could close the transaction in two weeks.
If you think about the situation you can understand why rates advertised in a Sunday paper are hardly reliable. In order for that lender to advertise their rates in a Sunday paper, the copy is probably due at the very latest by Friday; in all likelihood it is much earlier in the week. Therefore the rates you see, on Sunday when the banks are closed, are easily 4 days old. Rates can change considerably during any given day.
The best thing for you to do when looking in the newspaper is to call first thing
Monday morning to get an accurate rate quote. If the rate is what you were looking for then the mortgage broker can lock it for you for with no upfront fees. Keep in mind that you may need to have qualifying credit to qualify for the listed rates.
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Information listed above is to be used for educational purposes only and is not guaranteed