Mortgage Interest Rates, Fees and Points – Important Information | Bedford NY Real Estate

When you decide to purchase a home, a lot of people think alright, I have the money for a down payment, my credit score is good, so let’s buy a house. It can be that simple but…… There are other things involved in buying a home that most people do not consider. This is points, fees and interest rates. These types of things are calculated in the beginning stages of taking out a loan so needs to be considered before signing on the dotted line.

Points – Also known as buy down points. This is a fee that is paid up front to get your interest rate lower through the life of the loan. The more points you are able to purchase up front the lower your interest rate. For instance, if you have a $100,000 loan, points will probably cost $1,000 per point. Points being the interest rate. So, if you purchase 5 points at $5,000, you should be able to lower your interest rate 5 points through the life of the loan. This can be a huge savings if you can afford to purchase points.

Interest Rates – Interest rates are based on your credit scores. If you have a very good credit score of more than 750 you can sometimes get a very low score and no down payment. The worse your credit score is the higher your interest rate will be and you can end up paying much more for your home than necessary simply because of a bad credit score. This is where buying points will come in handy. Those that can afford it can lower their interest rate over time no matter what their credit score is.

Fees – Fees can range from anything to realtor fees, closing costs, home inspections, appraisal fees and others. Be sure to find out for sure which fees will be associated with your mortgage. Sometimes the buyers pays closing costs and others expect the seller to pay for then.

There are many excellent real estate agents and lending institutions in the Washington DC area. There are also many home listings for sale. It is just a matter of putting the two together to find the right path for you. Visit a real estate agent today and it just may not be long before you are in the home of your dreams.

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