How do you "buy" a better rate?

Do you plan on keeping your loan for a while? Then it may make sense to "buy" a lower interest rate by paying one or more "points."

Even if you're unsure of how long you plan to keep your mortgage before you move or refinance, paying points now for a lower rate may make sense. For example, do you have a high-paying job now but you think you might change careers in the next few years? We can help you sort it out. It's part of our Mortgage Consultation where we find the right loan for your means and goals.

Each point -- which equals one percent (1%) of the total loan amount -- is an up-front fee that lowers your monthly interest rate and total interest due over the life of the loan. So, a one point loan will have a lower interest rate than a no point loan. Basically, when you pay points you trade off paying money later in favor of paying money now. You can pay fractions of points, meaning there are a lot of points packages that can make a loan's terms more favorable if during the Mortgage Consultation we determine that's what's right for you.

So the question is, "How do you know what combination of rate and points to chose?" After all there are a variety of rate and point combinations available. When you look at different loan programs, don't look just at the rate,-- instead, compare the Total Loan Cost. Our Total Cost Analysis actually shows you the total cost of one mortgage loan compared to one or more other mortgage loans. Ask for our Total Cost Analysis, it's much more than any rate and point quote you can receive. Federal law requires lenders to publish their loans' Annual Percentage Rate, or A.P.R. The A.P.R. is a tool used to compare different terms, offered rates, and points.