Why are rates all over the place? I see on this site some lenders have it at 4.875, others at 4.5. Isn't that a big difference in payment?

Simple answer is that a lot of lenders are going to try and bait you into thinking a rate is available when it may not apply to your situation. The more in depth answer is that rates are constantly changing through out the day according to what happens in the trading markets. The best way to track whether rates are going up or down is to watch the trends in the Bond market. You can do this by following yahoofinance.com and keep your eye on the one month treasury bond rate. if the bond rate is up rate are getting lower if it is down then rates are going up! Let me know if I can be of any assistance to you down the road.

Rates change on a daily basis. The rates that you might see posted are possibly for different loan programs. FHA, Conventional, Jumbo, 30 year, 15 year ect. are all different loans with different rates. To be effective you need to see what you actually qualify for. But to answer your question, a .25 difference in rate or so is marginal. Each lender can be off more than .5 % for various reasons. Such as the cost of the loan, whether you pay points to obtain the rate ect...Lets say a 200k loan with 4.875 rate for 30yrs = $1,058 and same terms for 4.5 = $1,013. Not much of a monthly difference, but how much extra did it cost you to obtain the 4.5 rate in closing costs. How long will it take to break even on the extra cost, to obtain a lower rate? There are many factors in rates, if you are still in need of explanation you can contact me. Thanks!!!

Hi there:With my bank, we do not charge any pts or origination fees. Some lenders will charge pts to buy down the lower rate for you the consumer. I would suggest calculating the discount amt that the bank will charge to obtain the lower rate and compare that to the higher rate (how long it will take to re-coup the discount you will pay) etc..I would be glad to further answer any questions should you contact me. Be glad to provide you with a loan comparison figure on both rates.I would be glad to further discuss should you contact me.

Your decision should be based on rate and closing costs. Most lenders can provide a wide range of rates for any particular circumstance. However, the closing costs which are associated with each rate can be much different. There are a few factors to consider when choosing the right combination. How long do you plan on being in the home? You may get a lower payment with higher closing costs and a lower rate. However, it may take you ten years to recoup the difference in closing costs you paid. If you sell in 1-9 years then you lost money by paying for the lower rate. What is the APR? That is your true cost of borrowing the money.

Rates change daily.Suppose that the 4.875 rate carries no lender fees on a 300K loan.That covers all your costs in the Yield spread, processing, underwriting, application ect. The 4.5% rate is a lower payment but has $2500 in fees. For someone with limited cash needed for a down payment and closing costs the 4.875 loan would be a good deal. Say they had only the 60K down and the house they want to buy is too much in payment for FHA DTI because of thier debts to qualify and seller is paying closing costs thats all they have still a decent rate and got them in the house. This could be in a program like Homepath where they had no money down and they took the 3.5% csh incentive to close and asked fannie for the other 2.5% for seller consessions. Homepath charges at least 5.0% or 1.5 points more due to no mortgage insurance, in this case the higher rate pays the fees and they are able to buy. Every lender wants to make money, no one in this regulatory environmnet wants to take advantage of a buyer.....market is ver competitive so shop arround, me I will beat any GFE from another lender just to stay competitive.