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Understanding Rates

Interest rates can change on a daily basis according to market expectations and actual levels of inflation, economic growth, and Federal Reserve policy. Inflation has a great influence on interest rates. A low inflation rate often goes along with low interest rates, whereas a rising inflation rate often accompanies increases in interest rates.

What is Annual Percentage Rate (APR)?

The Annual Percentage Rate (APR) is the actual loan cost of your loan. It is often higher than the interest rate because it also incorporates discount points, mortgage insurances, and other costs to obtain the loan. Your APR will appear on your Truth In Lending statement, which is required by the government for all lending institutions. Your mortgage lender will be able to explain the charges included in your APR.

Is a 15-year or a 30-year mortgage best?

The answer to this question depends on your personal financial situation. Try our mortgage calculators and speak with your mortgage lender to help make that determination.

Locking a Rate

Locking in an interest rate allows a borrower to select a current rate of his or her preference and reserve that rate for a period of time (refer to your mortgage lender for more details). Because interest rates can fluctuate at any time with inflation and economic conditions, borrowers may choose to lock in a rate to protect themselves from these fluctuations.

A lock is an agreement created between the borrower and the lender. The agreement stipulates the number of days for which a loan's interest rate and discount points are guaranteed. If interest rates rise during that time period, the lender must honor the agreed upon rate. If interest rates fall during the term of the agreement, the borrower must honor the agreed upon rate.

Loans are subject to credit approval. Some restrictions and loan fees may apply.

Mortgage Resources

We know the home loan process can be a complicated affair. Our Mortgage Resources are designed to help explain the most common concepts and questions.