What are points?

A point is 1% of the loan amount. For example, 2 points on a $300,000 house, equates to 2% of $300,000, or $6,000. The number of points charged for a mortgage varies, depending on the circumstances. Paying higher points may result in a lower interest rate, costing you less over the life of your loan. You will pay the point fees at closing, and may be able to deduct the point amount as interest on your income tax return. (Consult a tax professional.)

Why is the Annual Percentage Rate (APR) different from the interest rate?

The annual percentage rate is intended to reflect the total cost of your mortgage loan. To calculate the APR, lenders consider the interest rate on your mortgage loan, the term of the loan, and other loan fees such as closing costs, points, etc. Your monthly payment is calculated based on the mortgage note rate, not the APR. The APR will be higher than your interest rate, especially if you are paying any points.

To be used as a valid evaluation tool the APR must be loan specific. The actual APR will show up on the Truth-in-Lending statement that you will see once you have submitted your information and reserved your funds. When comparing loan programs based on APR make sure you ask each lender their criteria for determining the APR.

How often do interest rates change?

Interest rates change regularly with the fluctuation of the market. The interest rates we quote you on the site are good for two hours. If a quote expires, you will be prompted to resubmit to receive an updated quote. Of course, once you lock or protect your rate, it will not increase as long as you close and fund your loan on or before the rate expiration date.

How do you determine my loan’s interest rate?

We evaluate your credit history and reward your good credit with a better rate. We also take into account your loan to value or LTV, as well as your income, your assets, the purpose of the loan and how you intend to occupy the property. Naturally, all of this is impacted by the current market conditions.

What if interest rates go down after I lock my rate?

Once you lock the rate, it cannot be changed. For that reason, it's important to consider carefully the timing of your rate lock. If you follow the market or plan to watch it closely, be sure you're comfortable with the trends you see before you lock. You may want to consider our rate protection program to help safeguard against changes in interest rates.

What happens if my loan does not close before the rate lock expiration date?

When you lock your interest rate, you are guaranteed to receive that rate as long as you close and fund your loan by the specified expiration date. If your loan closes and funds after this date, you are no longer guaranteed your locked interest rate. Instead, you will receive the higher of the current market rate or your locked rate. Please note that you cannot receive a lower rate by allowing your lock to expire.

If I have selected rate protection and do not exercise my one-time float down option, what will happen?

If you have not exercised your one-time option to float down, your rate will automatically be locked at the market rate, five days prior to your closing date. If the rate has gone up and over your capped rate, you will receive the capped rate. If the rate is lower than the cap, you'll be locked in at the lowest rate available to you.

Are discount points tax deductible?

In many cases they are. Contact your tax preparer or the IRS to obtain a qualified opinion and the best expert advice.