When a Home Loan Officer or Loan Shopper quotes me an interest rate, can it change?

Yes! Not only can the interest rates change daily but up to a few times in one day. The only way to guarantee your interest rate is to have your Home Loan Officer or Loan Shopper lock it in.

What can affect my interest rate on my home?

a. There are different types of interest rates for different types of homes: condos, town-homes, single-family residences. There are even different rates for manufactured homes.
b. When an interest rate is offered to you, there are costs for each rate. These costs are usually known as points or discount points. For example, if you were quoted an interest rate of 7% and then another interest rate of 6.50%, the difference may be in the points or discount points on the Good Faith Estimate. At Lendingladies.com, we do not try to tell you that we have no points or discount points on your loan and then charge the cost but with a different name. We are NOT about unpleasant surprises!

When should I lock in my interest rate?

Lendingladies.com prefers to have you lock in your interest rate once you have a property address for the new loan. For example, if you are refinancing your current home, then lock in at the time of an approval. If you are purchasing a property, then you lock in your interest rate once you have an offer accepted on the home. When you look at locking in an interest rate, there is usually a timeframe that it is good for. This can vary from 10 days to 60 days. It does cost you more money the longer the interest rate is locked in. Your Personal Loan Shopper will advise you and answer ny questions you may have about the right time to lock your rate.

Can I hold my Loan Officer or Loan Shopper to the interest rate if they have informed me that they have locked in the interest rate?

After your interest rate has been locked in, you will receive that rate based upon the following three factors:
a. The amount of equity in your home or the amount of money you are putting down does not change.
b. If you close on your loan within the timeframe you locked your interest rate in.
c. If your loan approval is still the same and has not changed. If any of the above does change, then your interest rate may no longer be valid and will need to be re locked on that day’s interest rate pricing.

Do I have the option to not lock in my interest rate and hope that they go down?

You can, but you do take a gamble as interest rates can change up to several times each day. Our philosophy is this: If you are happy with the interest rate and payment offered, then inform your Home Loan Officer or Loan Shopper that you want to lock in your loan as soon as possible.

When Lendingladies.com informs me that they have locked in my interest rate, is it really locked?

Yes! When Lendingladies.com states that they have locked in your interest rate, they really have locked it and do not gamble with your finances. Some lenders say they lock your rate and then watch the market to lock in the rate at the best time for them to make a profit off the rate. Lendingladies.com won’t take part in something like this.

What is the truth on 1% interest rate loans?

There are loans with lower interest rates. How do they really work? You make a minimum payment based upon the 1% rate, but the true rate is higher. For example, let’s say your minimum payment is based upon 1% and the true rate is 6%. The difference in payment will be added to the principal of your loan amount. In the end, your loan balance will be higher than what you started with.
• Why would someone want this loan?
Some people are in a position to leverage the equity in there home to invest in other properties. So while their home value is increasing, their bank account is too. Lendingladies.com is very comfortable talking about these loans with people who feel they are in a position to do this kind of loan. If anything, we will educate you more on this loan type.

What’s the skinny on no closing cost loans?

Yes, there are loans that have no closing costs. Lendingladies.com is sure that you would agree with the adage: You can’t get something for nothing. You can receive a loan that has no closing costs, but your interest rate will be higher. Our Loan Shoppers will do an analysis for you to see if this loan is in your best interest verses paying closing costs for a lower interest rate.

For EXAMPLE: Let’s say Mr. Smith has a loan of $400,000. His payment on 7% for a 30 year fixed loan is $2661.21 and Mr. Smith has $6,000 in closing costs to obtain this loan. Let’s now look at Mr. Smith having no closing costs and an interest rate of 8%. His payment will be at $2935.06. This equals a payment that is higher by $273.85 per month. If Mr. Smith did not want to be in the home long, then a no closing cost loan would be best for him. Otherwise, let’s take the closing costs of $6,000 and divide it by his savings per month of $273.85. We come up with 21.91, which equals 1.83 years. If Mr. Smith were going to be in the home longer than 1.83 years, then he would want to pay closing costs. If he were in the home for 5 years and opted for a no closing cost loan, he would end up paying more money for the home.

Why is the interest rate on the Truth In Lending higher than the interest rate I was quoted?

This is not your true interest rate. This rate is your APR, also known as annual percentage rate. The APR was put in an Act to protect you from high cost lenders. For example, Lender A may state they have a rate of 6% and Lender B may state they have a rate of 6% as well. Lender A will have $4,000 in costs and Lender B will have $7,000 in costs. As a result, Lender B will have a higher APR that is on the Truth In Lending. It is a way to protect you from a home loan officer trying to quote you a lower interest rate but not inform you of the higher fees that they will charge you to obtain the loan.

“But beware, not all Lenders disclose on the TIL correctly, so it is always better to look at the actual costs on both Good Faith Estimates. This way you know what the fees are and who is really charging more in costs than relying solely on the APR”.

At Lendingladies.com, we offer a whole team that is dedicated to taking care of you. When it comes to interest rates, our Loan Officers and Loan Shoppers have reports emailed to them by Mortgage Market Guide and Barry Habib, who is a trusted expert on interest rates. His reports will help Lendingladies.com decide if you should lock in your interest rate or potentially wait. Please remember that nobody can predict the future exactly on interest rates, but the knowledge at Lendingladies.com is priceless.