Even if you’re not in the habit of following national financial news, it may be beneficial for you to pay attention to what’s happening with mortgage rates. Being ready to take action and picking the right moment to refinance your mortgage could lead to saving a lot of money. Here are the top 3 reasons why mortgage rates are worth your attention.
1. Mortgage Rates Mean Big Money
Over the course of a 30-year mortgage, you may end up paying more in interest than the actual price of your home. When you look at your out-of-pocket costs over time, you can see that it’s crucial to choose a mortgage product that locks in the lowest possible interest rate. Even one-eighth of a percent can save you thousands of dollars over the lifetime of your loan.
2. Low Rates Make Lender Speed Important
Mortgage interest rates are volatile as they are prone to react to a wide array of national and international financial events. ABC News advises mortgage borrowers to “lock a rate as soon as you can.” Just because rates are low this week doesn’t mean they’ll stay that way, so your long-term financial health may hinge on finding a lender who can move quickly to freeze a great interest rate in place for you
3. Understanding Rates Will Help You Shop
Lenders all base their loans on similar nationwide mortgage rates, but the annual percentage rate (APR) that they offer you will vary widely from one lender to another. The APR is the basic mortgage rate along with the lender’s own extra charges added onto it. For example, you may find two lenders who will both charge you the same basic mortgage rate (say 5 percent), but one may have an APR of 5.14 percent and another may have an APR of 5.32 percent. If you are aware of the fact that all lenders are offering about the same basic mortgage rate, you can compare APRs and find the best deal.get a free quote.