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Mortgage Interest Rates

The mortgage industry is awash in acronyms, but you will hear APR often. It is the annual percentage rate the government has instituted to make figuring out how much you will be paying in interest over the life of your loan. This way you can actually compare mortgage offers from different companies. However there are many factors that can add to your mortgage, not just the APR.

Another factor when considering applying for a mortgage loan is the rate lock-in. Interest rates fluctuate daily...what is good for today may not be good for tomorrow. From the time you apply for your loan to closing the rate may have changed considerably either up or down. A rate lock-in is a promise from the lender that you will be able to get the loan at a specific rate with specific points, regardless of what the going rate is at closing.

Make sure you ask how long the lock in period is and then the average time it takes to process a mortgage loan application. You don't want the lock in rate to expire while you are waiting for the lender to finish your application. Also, get it in writing. A verbal agreement is as good as the paper it is written on. Watch out for additional fees.Some lenders charge extra for a lock-in commitment, sometimes as high as a point.

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