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Local Voices

The Truth About Mortgage Interest Rates

I went on line today (4/1/14) and checked three of the big bank's 30 year fixed mortgage interest rates - they ranged from 4.375 to 4.5%. So are these rates for real and is that the rate you will get if you apply? The answer is most likely no and this is why. When a lender advertises a mortgage interest rate, that rate has to be actually available - and it is. If you happen to be the perfect borrower. Someone with a very high credit score, a high income, very little debt and a perfect credit history. Unfortunately, few of us fall into that category. In fact many people who do are so well off that they can buy a home with cash and don't even need a mortgage!

Now, if you were to ask a reputable loan officer what his company's 30 year fixed mortgage interest rate is you would likely be told something like "mid 4's to mid 5's". In other words anywhere from roughly 4.5 to 5.5%. You may think your loan officer is being evasive or doesn't know what he/she is talking about. That is not the case. The loan officer does not know you and does not know your credit score, income, amount of debt or credit history and without that, the loan officer cannot give you a more specific answer to your question.

If you are serious about buying another home, the very first thing you need to do before calling a real estate agent and before looking at properties is to get preapproved for a mortgage. This doesn't mean having someone take out their calculator, run a few numbers and tell you that you are good to go. This means going to a lender and providing the documentation required to actually get preapproved. At that point you will know that you can get a mortgage and how much home you can afford. You will also have a good idea of the interest rate you will pay as well as your monthly payment. The final interest rate may vary somewhat depending on when you lock in the rate.

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For further information, contact: Dale Athanas, Loan Officer, NMLS#1065087, Northeast Financial Mortgage, 860-876-0466, dale@daleathanas.com.


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