Mortgage Interest Rate Fundamentals

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Home Loan Rates
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Mortgage Interest Rate Fundamentals
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• An interest rate is the price of money, and a
  home mortgage interest rate is the price of money
  loaned against the security of a specific home.
• The interest rate is used to calculate the
  interest payment the borrower owes the lender.
• The rates quoted by lenders are annual rates.

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• Home Loan Rates and Other Loan Charges Interest
  is only one component of the cost of a mortgage
  to the borrower.
• They also pay two kinds of upfront fees, one
  stated in dollars that cover the costs of
  specific services such as title insurance, and
  one stated as a percent of the loan amount which
  is called "points".
• And borrowers with small down payments also must
  pay a mortgage insurance premium which is paid
  over time as a component of the monthly mortgage
  payment.

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• Fixed Versus Adjustable Interest Rates A mortgage
  on which the interest rate is set for the life of
  the loan is called a "fixed-rate mortgage" or
  FRM, while a mortgage on which the rate can
  change is an "adjustable rate mortgage" or ARM.
• ARMs always have a fixed rate period at the
  beginning, which can range from 6 months to 10
  years.
• Source http//www.huffingtonpost.in/entry/mortgag
  e-interest-rate-fu_b_12083874

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