When it comes to buying a house, the numbers aren’t always straight forward. Purchasing a house is a costly expense that comes with lots of fees and nuances. Stonebridge Mortgage Group is here to help Portland locals understand all of the ins and outs of buying a home. We’re eager to help all Portland locals in need make the best decision when shopping for a home.
APR vs. Interest Rate
If you’ve been looking into buying a home in Portland, you’ve likely heard both of these terms. Some home buyers get the two confused, but it is important that Portland locals understand that your APR, or annual percentage rate, and interest rate are not the same thing. Both APR and interest rates are tools to help you comparison shop as well as determine the affordability of the loan. However, they are not the same thing.
Put simply, an interest rate is the cost of borrowing the principal loan amount for your home. Interest rates are always expressed as a percentage, and they can be variable or fixed. The interest rate and principle balance together are what your monthly payment will be based off of. Your credit score will determine your interest rate. It is best to have a high credit score in order to secure a low-interest rate.
APR, on the other hand, is a broader measure of the cost of a mortgage. It includes the interest rate as well as additional costs such as broker fees, discount points and some closing costs, expressed as a percentage. While the interest rate is determined by your credit score APR will be determined by the lender because it is composed of lender fees and other costs that vary from lender to lender.
Portland Locals Can Rely On Stonebridge Mortgage Group
Still having trouble understanding the difference between interest rates and APR? Have other questions related to buying a home in Portland? Don’t hesitate to ask Stonebridge Mortgage Group. We offer a wide range of mortgage-related services and are eager to answer any questions you have. What services does Stonebridge Mortgage Group offer?
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Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters
For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home! Call Stonebridge Mortgage Group today at 503-661-5580.
Gresham first-time home buyers may feel daunted with all that the information that comes along with buying a home. However, Gresham home buyers shouldn’t feel overwhelmed. By carefully educating themselves, they can ensure that they get the best experience when shopping for a home. Stonebridge Mortgage Group is eager to help our Gresham clients understand the ins and outs of mortgage.
Keep in mind that shopping around for your mortgage is important. Just like you wouldn’t settle on the first house you saw, you shouldn’t settle on the first mortgage you discuss with one lender. Shop around and do your research to find a mortgage that truly works for you.
To aid in shopping for your mortgage, here are a few more terms you should know about when shopping for a mortgage:
To make sure your mortgage is affordable, it is crucial to get the best interest rate possible. Do your research to find out what the latest mortgage interest rates is before seeking out a mortgage lender. This means you will know what to expect and prepares you for potential negotiations. For example, if you know that the national interest rate average is around 4.5% in the morning and a particular lender offers you 5%, you know you have room to negotiate. Get quotes from at least four lenders to compare your options, but make sure you are comparing rates on the same types of loan.
When speaking to potential lenders, ask about how many points you will have to pay to obtain the specific interest rate. Mortgage points are pre-paid interest. One point equals 1% of the loan amount. The more points you pay upfront, the lower your loan’s interest rate. This can be beneficial for Gresham home buyers in the long run.
Annual Percentage Rate (APR)
Although some people use “APR” and “interest rate” interchangeably, your APR is something very specific. Your Annual Percentage Rate shows the true cost of obtaining a loan, including points, the interest rate, broker fees, and any other charges. Ideally, Gresham home buyers want to aim for an APR that is as low as possible, because a lower APR means you are getting a better deal.
After taking into consideration the type of loan, interest rate, repayment terms, and APR Gresham home buyers can sit down and make the choice about which loan is best.
Locking In Your Rate
The next step for Gresham home buyers, after finding a mortgage loan that suits them and receiving preapproval, is to ask the lender to lock in the interest rate and provide you with a document in writing that states the interest rate you locked in, the number of points you must pay, and how long the interest rate will be locked in before the offer expires.
This is a way to secure your mortgage being what you need it to be. Locking in an interest rate means that even if interest rates rise within the specified time that you were guaranteed, you can still option a mortgage loan for the lower rate that you locked in. However, this can also work the other way. Should the interest rate lower within that time, you could be stuck with a higher rate. All things considered, though, it is generally a wise idea if to lock in your interest rate if you are serious about purchasing a home soon.
After all of the above, it is time to shop around. There are a variety of ways to shop around for a mortgage in today’s market – whether it be by going to an independent mortgage broker, calling local banks and credit unions, or shopping online. Carefully consider your options before committing. If you have any questions about mortgages, you can always rely on Stonebridge Mortgage Group for help.
Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters
For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!