MortgageCast

The amount you save depends on your loan amount, interest rate, and the size and frequency of your extra payments. For example, on a 30-year, $300,000 loan at 4% interest, an extra $100 per month could save you over $27,000 in interest and allow you to pay off the loan nearly 5 years early.

Not always. While a lower APR generally indicates a lower-cost loan, you must consider your timeline. If you pay points to buy down the rate (and APR), it takes time to recoup that upfront cost. If you sell or refinance before that break-even point, a loan with a slightly higher APR but no points might have been cheaper.

The fundamental difference lies in whether the loan meets the specific guidelines set by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. A conforming loan “conforms” to these standards, including maximum loan amount, borrower credit score, and debt-to-income ratios. A non-conforming loan does not meet one or more of these criteria and cannot be purchased by Fannie Mae or Freddie Mac.

Using a Broker offers several key benefits:
Choice & Comparison: They have access to a wide range of lenders and products, often including major banks, credit unions, and non-bank lenders, providing you with more options.
Saves Time & Effort: They do the legwork of researching and comparing dozens of loans, saving you from filling out multiple applications.
Expert Negotiation: Brokers often have established relationships with lenders and may be able to negotiate a better interest rate or waive certain fees on your behalf.
Expert Advice: They can explain complex loan features and help you navigate the entire process, which is especially valuable for first-home buyers or those with unique financial circumstances.