Find the Best Mortgage Rate | Mortgages Bend OR
A very important report released recently by the Consumer Financial Protection Bureau found that 47% of Americans don’t bother to shop around for a mortgage when they buy a home. According to CFPB Director Richard Cordray, “Consumers put great thought into the choice of a home, but the mortgage process continues to be intimidating.”
It is important to remember that due to the long length of mortgages, even a very small difference in interest rates makes a substantial difference over time. For instance, a half of a percent may sound like not that big of a deal. However, over time this can build up to more than a $25,000 difference for a typical borrower! Just think of what could have been done with that money to improve the quality of life in other areas!
Let us focus on a concrete example with hard figures. In this case the purchaser obtains a 4.5% interest rate loan, and the wonderful home had a sale price of $321,800. With a down payment of 20% the loan amount was $257,440. If the mortgage was a 30-year fixed rate at 4.5%, there will be a total of $212,148 in interest over the life of the loan. By contrast, at a 4% interest rate, the total interest will be $185,021. This is a whopping difference of over $27,000!
Keep in mind that with more expensive homes the figures increase, and the same goes for those purchasers who use a smaller down payment than the above referenced 20%. With a $500,000 mortgage a buyer is looking at more than $412,000 in interest over the span of a 4.5% 30-year fixed rate loan. This turns out to be close to $53,000 more in interest compared to a 4% rate. In addition, there is the impact on monthly payments. With a 30-year mortgage for $200,000, the difference between a 4.5 % and a 4 % loan comes out to around $60 per month. With a lower interest rate one also builds up equity at a faster rate.
As the saying goes, “It all adds up.” Even a 1/10th percentage point variance on a loan can mean thousands of dollars in extra payments to a bank over the life of the loan. Fortunately, shopping around for a mortgage is significantly easier these days than decades ago. A first step is to obtain copies of your credit reports from every one of the three major credit bureaus. Consumers are able to obtain free annual reports at www.annualcreditreport.com, or if you have done so already in the past year they are relatively inexpensive. Next, carefully study which type of mortgage best fits your needs, circumstances, and of course your budget. There are various online calculators that can assist you in calculating monthly payments.
After this necessary foundation is in place, it is time to obtain quotes from trusted and well-regarded local sources. Sometimes credit unions have some of the best deals, but again shop around. In addition, there are various online lenders that may favorably compare. Make sure you are comparing apples to apples in terms of total fees and interest rates. Yes, these sequential steps will require a bit of time and work, but just think of the other good uses you can put your hard-earned cash toward!
For more information, contact us to help guide you to the right place to find a mortgage in Bend, OR for your upcoming home purchase!