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What Is The Difference Between A Mortgage Broker and Lender

When you’re ready to get a mortgage, you face a dizzying array of choices: Fixed rate or variable? Points or no points? Mortgage broker or mortgage lender?

That last decision – mortgage broker or mortgage lender – involves a simple but easily misunderstood distinction.

Simply put, a mortgage broker is an independent professional who can shop around to find deals from a variety of lenders. A mortgage lender is represented by a loan officer who can speak only for that institution’s product line.

What does that mean for the borrower? As a practical matter, a mortgage broker can present you loan packages from multiple lenders – for instance, Wells Fargo, Chase and Quicken Loans. The loan officer from Wells Fargo, on the other hand, can pitch only Wells Fargo mortgages.

The advantages of dealing with a lender include reliability and reputation. With a broker, you have greater flexibility. Based on your financial profile, the broker may also line you up with a lender where you’re most likely to qualify for the loan.

When in doubt, comparison shop

So, which one should you use? There’s no clear answer, says Eric Tyson, author of Personal Finance for Dummies and co-author of Mortgages for Dummies.

“I’ve seen people be happy using either option,” Tyson says. “The important thing is to shop around.”

Tyson suggests soliciting loan packages from a mortgage broker and a couple of mortgage lenders, then judging which proposal offers the best deal based on rates and fees.

In the end, whether to use a mortgage broker or mortgage lender depends in part on your finances. If you have stellar credit and steady income and you’re shopping for a plain-vanilla loan, mortgage rates and loan fees are unlikely to vary much from one lender to the next.

mortgage-broker

If, on the other hand, you have spotty credit, you’re self-employed or you have an otherwise-tricky profile as a borrower, you may find the number of mortgage lenders willing to do business with you is more limited. In that case, it can be more convenient to use a mortgage broker. After all, they make a living from their knowledge of various loan products.

Laws offer protection

Unfortunately, the image of both mortgage brokers and mortgage lenders was tarred by a minority of unethical practitioners who built an unsavory reputation for themselves during the housing bubble. The movie The Big Short, based on author Michael Lewis’s expose on the U.S. mortgage meltdown of 2005, portrayed greedy mortgage brokers going so far as to target exotic dancers with bad loans. In another example, The Miami Herald reported in 2008 that thousands of convicted criminals were given mortgage broker licenses by the state of Florida. Not to be outdone, many mortgage lenders offered a menu of high-fee, high-risk loans.

Those excesses have largely gone away, however. The Consumer Financial Protection Bureau, created in 2010 to ride herd on the mortgage industry, released guidelines in 2014 that included a ban on “steering” – that is, on financial incentives for loan officers to push you into a loan you can’t afford. Lenders have stopped offering some of the risky loans that drove the housing bubble, and mortgage lenders and brokers operate under heightened levels of scrutiny and disclosure.

Tipping the negotiation in your favor

Whether you opt for a mortgage broker or a mortgage lender, the paperwork burden will be similar. Both will run a credit check, and both will ask for tax returns, pay stubs, bank balances and other information required for the lender’s underwriting process.

But payments for brokers and lenders are different, and understanding how the broker or loan officer is paid may help you land a better deal. Mortgage brokers are typically paid a commission by the lender – usually 1 percent to 2 percent of the amount of the loan. For loan officers at banks, compensation models vary. They might be paid a commission, but they typically collect a salary plus bonus.

To win your business, a mortgage broker might be willing to negotiate his fee, Tyson says. And the larger your loan, the more negotiating power you have.

Position Realty
Office: 480-213-5251

Should You CoSign On Your Kid’s Mortgage? The Crucial Questions To Ask Yourself

If your child is looking to buy a house and can’t qualify on their own, you may have thought about consigning on a loan. “It can be a brutal world out there, and you want to help someone you care about. That’s a perfectly reasonable argument,” said US News.

But have you examined the potential consequences of this action? Your good intentions could end up costing you, so you might want to ask yourself a few key questions before you sit down at the closing table.

What’s the plan?

It’s a good idea to examine the goals here – both yours and the recipient of your kindness. Is this house a long-term investment that will be on your credit for a long time? A short-term thing that’s only intended to help establish credit for your child? A moneymaking venture that could pay off for both of you after you flip the house? Knowing the plan can help you make the best decision.

Is your child responsible?

What have you observed about your son or daughter’s financial responsibility. Do they have a lot of outstanding credit they’re not managing well? Do they regularly borrow money without paying it back? Do they buy a lot of unnecessary items instead of being more prudent with their money and establishing some solid savings? These could all be red flags.

What is your financial commitment?

If your child needs a cosigner, does that also mean they need help with the down payment? If your money is going to be tied up in this home purchase, you’ll want to establish ground rules from the beginning. Is it a gift or a loan? If it’s a loan, what are the terms? What if he or she defaults? If your name is on the mortgage, the responsibility to pay may fall to you.

Why-You-Should-Never-Cosign-for-Your-Kids

How important is your credit to you?

Your credit is going to take a bit of a hit with the addition of a new mortgage.

“The loan appears on your credit report, and the monthly loan payment factors into your debt-to-income ratio – regardless of whether the primary applicant makes the payment each month. Because you’re liable for this balance in the event of default, being a cosigner can decrease your ability to get new credit,” said Money Crashers. “But this isn’t the only consequence of a higher debt-to-income ratio. Cosigning a loan can also lower your credit score because the amounts you owe makes up 30% of your FICO score. Thus, the more debt you have, the lower your credit score. Ideally, your debt-to-income ratio should be no higher than 36%, as your credit score will drop as your debt approaches or exceeds this percentage.” But the real danger is, again, in the possibility of your child defaulting on the loan.

“The bank wants to have someone on the hook in case a loan is not repaid; if you cosign a loan, you’re that person who is on the hook,” said GO Banking Rates. “So if your child doesn’t make his loan payments, you will be expected to do so – or risk suffering the impact of a defaulted loan on your credit score.”

Will two mortgages be a hardship?

Cosigning for a loved one could prevent you from doing the things you want to do, like buying a new house for yourself, refinancing, or even buying a car. “One potential downside for parents is that the mortgage will show up on their credit as an outstanding loan obligation, which could complicate refinancing or buying another home in the future,” said US News.

There may also be additional impacts to your finances you hadn’t considered. “You should consult a financial advisor first to make sure you can comfortably afford to help without jeopardizing your financial security,” they said. “You may also want to consult your tax preparer about potential tax implications, and, depending on the circumstances, ask a lawyer how to structure the legal paperwork in case your child divorces a spouse or defaults on the loan. Nobody plans on things going awry with real estate transactions, but it can happen, so it’s best to be prepared.”

How’s your relationship?

“Another important risk to consider with a cosigned loan is the effect it could have on your relationship with your child,” said GO Banking Rates. “Animosity can result from late payments or, even worse, defaulting on the loan.”

parents-estranged

What’s your goal?

If you’re simply looking to lend a hand, well, first of all, that’s super nice of you. Homeownership is still the American dream, and helping someone else’s come true is awesome. But, is putting your credit at risk really the best plan?

There may be much better ways to help, like:

Gift a down payment – just make sure you know the tax implications.

Put the house in your name and rent it to your child – if you have the financial wherewithal and the goal is simply to provide a safe place to live, this might be a better solution. You can always pass the home along at the later date by providing seller financing.

If you choose to go ahead with cosigning, take precautions. There are steps you can take to help protect yourself, like using the tools provided by the lender to set up alert when payments are due, overdue, and when they’re posted, and setting up direct debit so payments are automatically made at the same time every month.

Position Realty
Office: 480-213-5251

CONFIRMING YOUR MORTGAGE LOAN BALANCE IS A YEARLY TASK

Have you ever wondered whether your lender has properly calculated your outstanding loan balance. All too often, we take for granted the mortgage loan balances given us by our lender, and never bother to check the figures ourselves. When we go to sell our house, the excitement of the settlement process often makes us overlook an important issue: was the loan payoff statement provided by our lender accurate?

Different lenders have different computer programs. However, at the end of each year, a mortgage lender is obligated to provide all borrowers with a statement indicating how much mortgage interest was paid during the previous year, and — if taxes were collected in escrow — how much was paid for the real estate taxes on the property.

Some lenders provide a running monthly statement, showing the old loan balance, the amount of the payment broken down into interest and principal, and the new loan balance after crediting the principal payment. Keep in mind that when you make a mortgage payment to your lender, interest is calculated first on the then-outstanding balance, and the difference goes toward reducing principal.

Let’s look at this example. You borrow $100,000 at 4 percent interest, to be amortized over thirty years. The computer — or an amortization program — tells us that the monthly payment required to fully pay off (amortize) the loan over a full 30 year period is $477.43. If we do some basic calculations, the first payment consists of $ 333.33 for interest and only $144.10 for principal. It should be noted that for the first seven years, you will be paying a lot more interest than will be credited toward the principal balance.

Thus, our example looks like this for the first two payments::

Mortgage Chart #1

Interest is always calculated on the then outstanding balance for the previous month, which is why the interest goes down (ever so slowly at first) and the principal goes up (ever so slowly).

If you did not make any extra payments over the life of your loan, these calculations can be done quickly — either by hand or preferably by using a computerized amortization program. However, if you have made a larger monthly payment, then you have to do the numbers. Let us further assume that in the third and fourth month, you decide to make a payment of $1,000, instead of the regular payment. The next two month’s calculation would look like this:

mortgage Chart#2

As can be clearly seen, if you make a larger payment every month, you will significantly reduce the length of your loan. In fact, if you make one extra monthly payment per year, you will reduce a 30 year loan down to approximately 22 years. And I recommend you spread the extra payments over the 12 month period, rather than making one lump sum at the end of the year.

confirm mortgage

If you decide to make these extra principal payments, make sure that you clearly notify your lender each time that you are making such extra payments. Write “Extra Principal, $___” on both the check and the mortgage statement which you send in to your lender.

If you do not have access to a computer, the math calculations — while easy — can be time consuming. Thus, each and every year, when you get your year end statement, you should spend a few minutes doing the calculations for the previous year, so as to confirm that the numbers are correct.

If you are having trouble reconciling your numbers with those provided by your lender, you should immediately request a payment history statement from your lender. At least once a year, your lender should be able to provide this to you — free of charge. Examine the statement carefully; make sure you have not been improperly charged late fees or other similar charges. Make sure that any extra payments you may have made during the previous year have been properly credited toward your principal balance.

Lenders and their computers are not always correct. But only you can confirm.

Position Realty
Office: 480-213-5251

THE FIVE BIGGEST MORTGAGE MISTAKES YOU CAN MAKE

For most buyers, the mortgage is the largest monthly expense they will have. Yet most borrowers will do little to no preparation, negotiation, or shopping to get the best deal. And they end up paying much more for their loans than they need to. You? You’re smarter than that, or you wouldn’t be reading this article. Here are five of the biggest mistakes that can cost you real money.

1. Believing advertised rates are what you’ll pay

Unless you have perfect or near-perfect credit, most advertised rates are out of your league. To get boasting rights on a rate that good, you have to pay part of a point (one percent of the loan amount) a point, or more to get the best rates.

Your lender will go over your credit with a fine-tooth comb to find anything to raise the rate. That includes qualifying you at the beginning of the transaction, and then running your credit again a day or two before you’re supposed to close on the home and loan. If there’s been any change in your debt-to-income ratio, goodbye low mortgage rate.

2. Not comparing lenders

Just like everyone knows two or three real estate agents or more, everyone knows a loan officer or a mortgage broker. A loan officer works for a bank or savings and loan and can only offer you loan packages that the bank has put together. A mortgage broker prequalifies you just like a loan officer, and shops your deal around to various lenders.

Whether you talk to a loan officer or a mortgage broker, you’re going to have to share personal financial information in order to get a realistic rate. Reputable brokers will show you what certain banks and credit unions quoted and you can pick the loan you like best.

If you’d rather do your own shopping, consider talking to a local bank, a national bank, a credit union, and a savings and loan, but remember, unless you give them personal information and permission to run your credit, it’s just talk.

3. Not paying attention to terms

Advertised rates even for those with perfect credit aren’t what you will actually pay. The true cost of the loan is the APR or annual percentage rate, which includes fees from the lender.

Understanding loan terms is harder than shopping for a new mattress. There are so many ways lenders can inch up the fees. A loan origination fee is also called a processing fee. It pays the loan officer or mortgage broker, so this fee can vary widely. You may pay one lender more for an appraisal than another might charge you.

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One lender may charge more for pulling your credit than another. It’s all in your good faith estimate, which you don’t get until you’ve applied for the loan.

All terms are negotiable, so don’t be afraid to ask what a particular fee is for and can it be reduced or eliminated.

4. Waiting for a better rate

It’s great to have bragging rights on a low rate, but you don’t want to lose the home of your dreams over a quarter of a point in interest.

There’s a big picture here you could be missing. No matter what your interest rate is, you’re going to pay thousands of dollars in interest up front before you make any serious gain in equity. If you go all the way to the end of your loan’s term, you’ll pay so much interest that you could have bought the same home two or three times.

Instead of focusing on the percentage rate, work on how quickly you can build equity. Make one extra payment a year. Pay $25, $100, or $500 extra per month and you’ll more than offset the rate you’re paying.

Down the road, if rates drop through the floor, you can refinance, but even that’s not an ideal solution. You’ll pay loan origination fees, title search fees, appraisal fees and so on — enough to equal the closing costs you paid the first time around.

And don’t forget, you’ll start the amortization schedule all over again — with most of your payments going to interest instead of principal.

5. Choosing the wrong type of loan

Many families were hurt post-9/11 when lenders opened the spigots and gave a loan to almost anyone who could sign the paperwork. Suckers bought homes that were too expensive using balloon loans with low teaser rates.

The type of loan you choose should depend on current market conditions and how long you plan to stay in your home, not how much home you want to buy.

Current market conditions favor fixed rates, because rates are rising from all-time lows. Yes, they cost more than hybrid loans or adjustable rate loans, but the base amount is fixed and doesn’t change. Only your taxes and hazard insurance will cost you more over the years.

If you get an adjustable rate mortgage, you are at the mercy of market conditions. While there’s a cap on how high your interest rate can go, it’s still a risk.

If you plan to stay in your home five years or more, get a fixed-rate mortgage. If you plan to sell your home sooner, you’re taking a risk. It takes most borrowers five years just to earn back their original closing costs in equity.

Once you’ve narrowed your choice of lenders, ask them on the same day to give you a quote. If you wait even one day, rates may have changed, so you’re no longer comparing apples to apples.

Position Realty
Office: 480-213-5251

THE MORTGAGE TRICK THAT COULD SAVE YOU $100,000 OR MORE

Should you switch to a 15-year mortgage? If paying off your house is a priority, you’ve obviously considered it. “One of the biggest benefits of a 15-year mortgage term is the ability to quickly pay off your home loan,” said Money Crashers. “This option is perfect if you plan to stay put and don’t want to pay your mortgage for a lengthy period of time.”

But even if you’re not planning to live in your home forever, a 15-year mortgage can be a great way to go because of the money saved. And we’re not talking about pennies. We’re talking hundreds of thousands of dollars.

“The 30-year fixed mortgage is practically an American archetype, the apple pie of financial instruments. It is the path that generations of Americans have taken to first-time home ownership. According to the Mortgage Bankers Association, 86% of people applying for purchase mortgages in February 2015 opted for 30-year loans,” said Investopedia. “But many of those buyers might have been better served if they had opted instead for a 15-year fixed-rate mortgage, the 30-year’s younger, and less popular, sibling. A shorter-term loan means a higher monthly payment, which makes the 15-year mortgage seem less affordable. But, in fact, the shorter term actually makes the loan cheaper on several fronts.”

The savings is substantial:

“Imagine a $300,000 loan, available at 4% for 30 years or at 3.25% for 15 years,” they said. “The combined effect of the faster amortization and the lower interest rate means that borrowing the money for just 15 years would cost $79,441, compared to $215,609 over 30 years, or nearly two-thirds less.”

A woman holding a house with cash and keys on a silver platter.

According to The Mortgage Reports, going with a 15-year mortgage translates to a reduction in “the amount of mortgage interest paid over the loan’s life by $44,000 per $100,000 borrowed as compared to a 30-year loan. For loans at the conforming loan limit of $417,000, then, a homeowner would save $183,000 by using a 15-year mortgage to finance the home instead of using a 30-year one.”

That’s a lot of money. But it’s that higher monthly payment that is often the sticking point for many borrowers. The monthly payment on a 15-year loan will cost more than one that’s double in length for obvious reasons—you’re paying off more money in less time. But the two loan terms do not offer an apples-to-apples comparison because the interest rates for 15-year mortgages tend to be lower.

House-Sold-for-Happy-Family

“15-year-loans are less risky for banks than 30-year loans, and because the money banks use to make shorter-term loans costs them less than the money they use to make longer-term loans, consumers pay a lower interest rate on a 15-year-mortgage — anywhere from a quarter of a percent to a full percent (or point) less,” said Investopedia. “And the government-supported agencies that finance most mortgages impose additional fees, called loan level price adjustments, which make 30-year mortgages more expensive.”

The monthly payment on the 30-yer mortgage referenced above is $1,432. On the 15-year loan, it comes out to $2,108. That steep increase is often a deterrent for borrowers – especially those who are more concerned with their current monthly input and output than potential long-term savings.

Doing it on your own

Of course, a 15-year mortgage isn’t the only way to pay your house off sooner. Making additional principal payments can eat away at your balance without tying you to a higher monthly payment. Even one extra payment per year can make a big difference.

“Making an extra mortgage payment each year (totaling 13 payments in a 12-month period) could reduce a 30-year mortgage loan to approximately 22 years,” said Nationwide.

“The most budget-friendly way to do this is to pay 1/12 extra each month. For example, by paying $975 each month on a $900 mortgage payment, you’ll have paid the equivalent of an extra payment by the end of the year.”

Overpaying also offers a shorter path to an equity position, so when you are ready to sell, you have more equity in your home and are in a greater buying position. And if you do get into a situation where you need cash you can always pull the equity out of your home.

Position Realty
Office: 480-213-5251

APPLYING FOR A MORTGAGE? KNOW YOUR NUMBERS

When you buy a home, it’s all about the numbers. Your mortgage rate is based on your credit scores, debt-to-income, and how much of a down payment you can afford.

Know your credit scores: Your credit scores can fall between 300 and 850. Lenders use these numbers, which are compiled by three credit bureaus and Fair Isaac to give them a quick snapshot of your credit-worthiness.

Lenders are still in a low-risk mood and are requiring fairly high credit scores from borrowers. To qualify for the best mortgage interest rates, such as a benchmark 30-year fixed rate, your credit scores must be approximately 720 or more. To find out what your credit scores are, visit www.annualcreditreport.com, the site where you can get free copies of your credit report and scores.

Know your income–to-debt ratios: To qualify you, lenders use two ratios — income to mortgage debt and income to total debt.

To qualify for a 30-year fixed rate conforming loan that is federally insured (FHA), your income to mortgage debt can be no higher than 29% of your gross annual income. If you make $5000 gross income per month, your house payment, including principal, interest, hazard insurance and property taxes, should be no larger than $1,450.00.

If you’re carrying credit card debt, student loans, or pay child support, your monthly debt service must be counted. To get the income to total debt ratio, multiply your monthly income by 41%. If you gross $5000 per month, your total debt -including your house payment – can be no larger than $2050.00. That means to qualify for a $1450.00 house payment, your other debt payments can be no higher than $600 per month.

Know your down payment: For most loans, your credit scores affect down payment requirements. If you have a high credit score, you can get an FHA-guaranteed loan with only 3.5% down, but if your scores are low, you may be required to put as much as 10% down. . FHA loans with less than 20 percent down require mortgage insurance that will not be discharged unless the home is refinanced or sold.

Conventional loans are sold by banks as securities to Fannie Mae and Freddie Mac, with the best rates only available to consumers with 20 percent down. You can obtain both FHA or conventional loans with less money down, but expect to pay a mortgage insurance premium, which reduces the risk for the lender.

Where your down payment originates also makes a difference to lenders. If you have saved the money yourself, or it comes from a recent real estate transaction, lenders tend to be more relaxed than if your parents are giving you the money as a gift.

All these numbers have to dovetail and make sense to the lender, so you can comfortably afford the home you want to buy.

Dodd-Frank Act Explained For Real Estate Investors

Some real estate investors and lenders have been sounding the alarm on the upcoming Dodd-Frank changes to seller financing, but most investors will have little to worry over.

As of January 10, 2014, the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as Dodd-Frank) went into full effect. The bill was actually signed into law by President Obama in 2010, and since then there has been plenty of buzz around investor circles about its impact and what the Dodd-Frank Act really means. Some real estate investors are worried about some of their seller financing practices and ultimately their assets.

The nearly nine-hundred page bill was drafted, in part, to try and address the many shortcomings of the financial industry, and relevant here is how it modifies mortgage lending practices (including seller-financiers) to try and protect borrowers in the wake of the last housing and financial collapse. Here’s what you will need to know to be in compliance, if you make any mortgage loans or do any seller-financing.

Dodd-Frank Act Explained For Real Estate Investors

Residential and Owner Occupied Only – First and foremost, the new law only applies to homebuyers who intend to occupy the home. If you sell strictly to other investors, the remainder of this article is purely informational and does not apply to you. Similarly, the new law does not apply to commercial deals.

Category 1 – Dodd-Frank distinguishes between individuals, trusts or estates who sell to only one owner-occupant buyer per 1 year and those who sell to more than one buyer per year. For purpose of this article, “Category 1” refers to circumstances where the seller (individual, trust, or estate only) finances one property per year to an owner-occupant. Category 1 does not apply to LLC’s, partnerships, corporations or other legal entities.

Under Category 1, the following applies:

  • Balloon payments are allowed
  • No proof of ability to pay is required
  • Note must be fixed for first (5) years, then may adjust no more than 2 points per year with a cap at no more than 6 points above the original rate (the original rate must be based on prime or an index such as T-bill or something similar).

Category 2 – This category references any individual, trust, or estate who sells to more than one owner-occupant buyer per year, but no more than three (3). It also refers to any LLC, corporation, partnership or other legal entity that sells to 1-3 owner-occupant buyers. To be clear, all legal entities are subject to the law in the same way as an individual seller who sells more than 1 property per year. Sellers in this category must abide by the following:

  • No balloon payments allowed
  • Must determine and show proof of buyer’s ability to pay
  • Allowed to do up to 3 transactions without becoming a MLO (mortgage loan originator) or hiring one (an MLO is the shiny new term for a licensed loan officer).
  • Note must be fixed for first (5) years, then may adjust no more than 2 points per year with a cap at no more than 6 points above the original rate (again, the original rate must be based on the prime rate or a an index like a T-bill or something similar).

Category 3 – For sellers who make more than three home loans (including seller-financed transactions) in one year, the new law requires MLO status or mandates that an MLO be hired to complete all transactions. Sellers in this category, whether individual or legal entities, follow all of the same rules as Category 2 sellers otherwise.

The law does not apply to commercial, multi-family properties with 5 or more units, or vacant lots/land, even if the buyer intends to occupy it as a residence.

Investors who take the time to understand the new changes know there is no need for panic and may, for the most part, continue to operate as they have been. The thing to keep in mind, which has always been the case for scrupulous investors, is professional and fair treatment at all times. Dodd-Frank is simply another approach to consumer protection. Investors can protect themselves and the consumer by simply knowing and following the new rules.

Position Realty
Office: 480-213-5251

How Interest Rates Affect Your Mortgage Payment

National average 30-year fixed rate mortgage interest rates have been under five percent for over five years. They should stay low forever, right?

Economists predict that the soaring economy, improved job outlook and ebullient consumer confidence will cause the Federal Reserve to start raising overnight borrowing rates to banks. Mortgage interest rates will become volatile, and things can change quickly for consumers.

To illustrate changing mortgage interest rates and their impact on your monthly payment, consider what a difference even a small dip and rise in interest rates means to you.

In December 2014, the median-priced home in the U.S. was $209,500, according to the National Association of REALTORS®. If you purchased this home for $200,000 and with 20 percent down and a benchmark fixed-rate mortgage with the December national average commitment rate of 3.86 percent (Freddie Mac), your payment would be $751.01 a month.

You’ll make 360 total payments of $270, 362.59, with $110,362.59 in interest over the term of the loan.

The same home with the same loan on February 5 would be very different. The national average commitment rate is 3.59 percent, your payment is 726.53 and your total payments add up to $261,552.16 and 101,552.16 in interest.

The difference isn’t much — just under $25 a month and $8,810 in round numbers.

But what if interest rates go up as economists predict? The January 2015 outlook by Kiplinger’s predicts that interest rates could go as high as 4.9 percent. What would your monthly payments look like then?

Your monthly payment would be $849.16, for a total of $305,698.59, and interest payments of $145,698.59, a difference of $122.63 monthly and $44,146.43 in interest by the end of the loan.

If you’re interested in buying a home, mortgage rates are unlikely to stay low much longer.

Position Realty
Office: 480-213-5251

Mortgage Rates Remain Near 2013 Lows

Average fixed-rate mortgages are holding near historical lows, but did inch higher this week amid a stronger employment report, Freddie Mac reports in its weekly mortgage market survey.

The economy added 257,000 new jobs in January, following additional increases in December (329,000) and November (423,000).

Despite this week’s uptick in rates, fixed-rate mortgages remain near lows from May 23, 2013, Freddie Mac reports.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 12:

  • 30-year fixed-rate mortgages: averaged 3.69 percent, with an average 0.6 point up from last week’s 3.59 percent average. A year ago, 30-year rates averaged 4.28 percent.
  • 15-year fixed-rate mortgages: averaged 2.99 percent, with an average 0.6 point, rising from last week’s 2.92 percent average. Last year at this time, 15-year rates averaged 3.33 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, up from last week’s 2.82 percent average. A year ago, 5-year ARMs averaged 3.05 percent.
  • 1-year ARMs: averaged 2.42 percent, with an average 0.4 point, also up from last week’s 2.39 percent average. Last year at this time, 1-year ARMs averaged 2.55 percent.

Position Realty
Office: 480-213-5251

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