George L. Duarte

Mortgage Loans Fremont California Horizon Financial Associates

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Mortgage Interest Rate Versus APR: What To Know

March 23, 2023 by George Duarte

Mortgage Interest Rate Versus APR: What To KnowWhen you go through the process of applying for a mortgage, you need to make sure you understand all of the terms on the page. Two of the most common numbers you will come across include the mortgage rate and the APR. Many people associate both of these numbers with interest rates, but you will probably notice that they are not quite the same. What are the differences between these two numbers, and how are they going to impact your mortgage loan?

The Mortgage Interest Rate

The first number you are probably going to look at is the mortgage interest rate. This reflects the additional money that you will be charged over the life of the mortgage. For example, if you take out a loan for approximately $250,000 that has an interest rate of 5 percent, you will end up paying not only the principal but also an interest component of approximately $233,000 over the life of the loan. Keep in mind that an interest rate can be fixed or variable, so make sure you read the application carefully. 

Annual Percentage Rate (APR)

The other number that you might see is your APR. This calculation is a bit more complex because it considers all facets of your application, not just the interest rate on the mortgage. Your APR is going to include other values as well, such as private mortgage insurance premiums, discount points, closing costs, and other closing expenses. This number might be a bit harder for people to understand, but it will also give you a more accurate picture of the total cost of your mortgage.

Ask Questions Before You Sign Your Contract

Because there are so many moving parts involved when you apply for a mortgage, you need to take the time to ask questions before you sign on the dotted line. You will be focused on your primary interest rate, as it will play a major role in the total cost of your loan as well as your monthly payment; however, you need to have an accurate picture of the other fees associated with your home loan as well. Reach out to an expert who can help you find the right mortgage to meet your needs.

 

Filed Under: Mortgage Tagged With: APR, Mortgage, Mortgage Rates

What’s Ahead For Mortgage Rates This Week – March 20, 2023

March 20, 2023 by George Duarte

What's Ahead For Mortgage Rates This Week - March 20, 2023Last week’s economic reporting included readings on housing starts and building permits issued, the National Association of Home Builders Housing Market Index, and Fed Chair Janet Yellen’s Senate testimony. The Commerce Department reported on housing starts and building permits issued published, and a monthly reading on consumer sentiment was published. Weekly reports on mortgage rates and jobless claims were also released.

Two bank failures instill fear in depositors

In the aftermath of two bank failures last week,  US Treasury Secretary Janet Yellen said that “the banking system is sound” during testimony to the US Senate last Thursday. When asked if federal protection could be extended to deposit accounts exceeding $250,000, Secretary Yellen replied that such action would “require approval from super majorities of the Boards of the Federal Reserve, the FDIC.and consultation between the Treasury Secretary and the president to determine that failure to protect uninsured depositors would create system risk and significant economic and financial consequences.”

NAHB: home builder confidence in US housing market improves

The National Association of Home Builders reported that its Housing Market Index for March increased by two points to an index reading of 44. Home builders expected a reading of 40 and the February HMI reading was 42. Readings below 50 indicate that most home builders surveyed were not confident about current housing market conditions.

The Commerce Department reported that housing starts exceeded expectations in February with 1.45 million starts reported as compared to the expected reading of 1.31 million starts and January’s reading of 1.32 million starts. Building permits issued also rose in February with 1.52 million permits issued as compared to expectations of 1.34 million permits issued and January’s reading of 1.34 million building permits issued.

Mortgage rates, jobless claims fall

Freddie Mac reported lower average mortgage rates last week as the rate for 30-year fixed-rate mortgages fell by 13 basis points to 6.60 percent. Rates for 15-year fixed-rate mortgages fell by five basis points to an average rate of 5.90 percent.

Initial jobless claims were also lower with 192,000 first-time claims filed as compared to the prior week’s reading of 212,000 claims filed. 1.68 million continuing jobless claims were filed as compared to 1.71 million ongoing claims filed in the previous week. 

What’s ahead

This week’s scheduled economic reporting includes readings on sales of new and previously-owned homes, the post-meeting statement from the Federal Open Market Committee, and Federal Reserve Chair Jerome Powell’s post-meeting press conference. Weekly readings on mortgage rates and jobless claims will also be published.

Filed Under: Financial Reports Tagged With: Financial Report, Jobless Claims, Mortgage Rates

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