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Owning a home is the dream of every American, but due to skyrocketing property prices, this dream remains unfulfilled for many. Don’t let this happen to you. Find the best mortgage rate and become a home owner. If you have a good credit history, even better! You will be offered a lower rate that will be in line with your repayment plan. Ask your lender about adjustable and fixed mortgage rates.
The mortgage rate may change during the term of the loan, depending on a number of factors such as your loan amount, the index it is linked to, the lender’s margin and more. You should know all about your programs and rates in order to avoid paying more than necessary amount on your mortgage loan.
lender’s margin
The lender’s margin plays the most important role in determining your adjustable rate for a mortgage. So, know the margin mark up of your lender. Your lender considers this margin at the time of ‘adjustment’, which is resetting your mortgage rate. This lender’s margin also tells how fast your interest rate will increase or decrease when your lender adjusts your loan. If you compare two similar home loans with the same interest rate, the loan with the higher margin will cost you more. It will also increase with market rate swings. So, make sure you know the margin that your lender is setting for your program.
The most common margin charged by lenders is 2.75%. When you see that a lender is quoting you a margin higher than the margin for your current mortgage loan or second mortgage loan, sit up. He might be trying to get as much money out of you as quickly as possible.
You can do the following to get closer to the margin of 2.75% when shopping for an adjustable mortgage rate.
With prudence and some cleverness, you can make your adjustable rate mortgage the best mortgage rate for you.
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