UNDERSTANDING MORTGAGE INTEREST RATES
One of the most confusing and overlooked areas of buying a house is understanding the interest rate you are paying on your mortgage. The reason for this is that buyers do not spend time checking the interest rate quote or obtaining multiple mortgage rates from banks and brokers. Many buyers in this market assume because they have a great credit rating and high FICO score that their mortgage broker or bank will automatically give them the lowest rate possible. Unfortunately, this is rarely ever the case. When you are purchasing a house or refinancing you must remember “Caveat Emptor”, buyer beware.

👉How to Obtain the Best Rate

📌Ideally keep the total mortgage, homeowners’ insurance, and property taxes under 32% of your monthly income. However, depending on your other debt some mortgage companies let you go closer to 50%.
📌Put down 20% to avoid Private Mortgage Insurance “PMI”
📌Determine what type of loan you can afford. With today’s low rates it is hard to think of a reason why someone would finance with anything other than a fixed rate loan over a term of 15, 20 or 30 years.
📌Most mortgage rates can be calculated based on the 10-year treasury rate. The bank determines what the 10-year treasury rate is and then calculates cost and profit above that rate to price their mortgages. A rule of thumb is a 30-year fixed-rate mortgage should be anywhere from 150 to 200 basis points above the 10-year treasury rate.
See this link for more info: https://www.federalreserve.gov/releas...
📌 Check mortgage rates here:
https://www.bankrate.com/mortgages/

📌The interest rate on your loan (in nominal terms) is the rate used to calculate your monthly payments.
📌The Annual Percentage Rate “APR” is the true rate including all the costs and fees, such as broker fees, origination fees and other expenses.
📌When comparing loans, compare the APR rate and calculate using 15 year, to 20 year to 30 year mortgages.
📌Be aware of unscrupulous banks and mortgage companies changing the terms of your original loan at closing. There has been a tremendous amount of fraud in this area in the last 20 years; especially back in the early 2000’s.


👉 For more information contact me below or visit our website: https://www.rabcpafirm.com/contact/?u...

Robert A. Bonavito, CPA
1812 Front St.
Scotch Plains, NJ 07076
908-322-7719