QWhen Trying To Compare All The Quotes I've Received From Lenders To Refinance My Home Loan, I Keep Getting Confused Since One Lender May Have A Lower Interest Rate But Higher Closing Costs, Another Low Closing Costs But Higher Rates. How Do I Figure Out Who Has The Best Mortgage Refinance Rates?!
ABefore you compare anything, you'll want to make sure you're comparing similar loans. Comparing the costs of mortgage refinance rates on a 15-year arm to the costs of a 30-year fixed-rate mortgage isn't going to help you figure out which lender is giving you the best deal. The best way to compare one lender to another is to compare the total APR instead of just looking at interest rates or closing costs individually. The Truth in Lending Act requires lenders to provide you with an APR, which is the cost of the loan including interest, lender points and closing fees. By reviewing the APR, you'll get to see the bigger picture rather than just one small part of it. You'll also want to consider how long you're keeping the loan. If you plan on moving within the next year or so, you're not going to want to go with a loan that has high points and a low interest rate because you're not going to be there long enough to recoup the costs you paid at closing. In this scenario, a higher interest rate would make more sense than paying a large amount of upfront fees. On the other hand, if you plan on staying in your home throughout the term of the loan, the lower-interest option will be your best bet.