Mortgage Basics 101
Frequently Asked Questions
Straight answers to the questions we hear most.
For a fixed-rate mortgage, the APR is locked in at closing and will not change. For an Adjustable-Rate Mortgage (ARM), the initial APR is fixed for a set period, but after that, it can fluctuate based on the index and margin outlined in your loan agreement.
Whether you should buy points depends on your individual circumstances and goals. Consider paying points if:
You have extra cash available for closing costs.
You plan to stay in the home long enough to “break even” (the point where your monthly savings exceed the cost of the points).
You prefer long-term savings over short-term cash flow.
You have extra cash available for closing costs.
You plan to stay in the home long enough to “break even” (the point where your monthly savings exceed the cost of the points).
You prefer long-term savings over short-term cash flow.
The best time is after you have received a formal Loan Estimate from a lender but before you have locked your rate. This is when you have the most leverage. You can also try to negotiate after a rate lock if market rates have improved significantly, but lenders are not obligated to adjust a locked rate.
Yes, it is possible, but it can be more difficult. Lenders may approve a mortgage with a higher DTI if you have compensating factors, such as:
An excellent credit score (e.g., 740+)
A large down payment
Significant cash reserves (e.g., 6+ months of mortgage payments in the bank)
A stable and long employment history
An excellent credit score (e.g., 740+)
A large down payment
Significant cash reserves (e.g., 6+ months of mortgage payments in the bank)
A stable and long employment history
The interest rate is the cost of borrowing the principal, while the APR includes the interest rate plus other fees and costs, giving you a more complete picture of the loan’s true annual cost. Always compare both.
Get weekly rate updates and mortgage tips
Are you interested in learning more about mortgage brokers in your area? Tell us a bit about yourself and we'll point you in the right direction — no spam, unsubscribe anytime.