Delaware Mortgage Loans

You’re most likely to encounter low interest rates and low annual percentage rates (A.P.R.) on television commercials or newspaper ads as lenders vie for the attention of potential borrowers.  This is just a tactic for them to get you to call so they can explain why you don’t qualify for the advertised rate and proceed to sell you on a higher rate and higher fees.  So remember the old adage “Buyer Beware”.

A.P.R. was created to provide a way for borrowers to account for costs associated with the mortgage. This sounds good because it may not be very easy to choose between a loan with a lower rate and higher fees or a loan at a higher rate with low fees.Although APR is supposed to be a shopping tool, it’s an inaccurate tool at best. While it’s designed to make it easier to compare loans, it’s sometimes confusing because the A.P.R. includes some, but not all, of the various fees and insurance premiums that accompany a mortgage. And since the federal law that requires lenders to disclose the A.P.R. does not clearly define what goes into the calculation, A.P.R.s can vary from lender to lender and loan to loan.

Another problem with APR is that it is calculated over the life of the loan, even though over 90% of all borrowers sell their house or refinance their mortgage before term. This can lead borrowers with relatively short time horizons astray.

This is why it is very important to speak with a mortgage professional who can advise you on the correct loan program that fits your current financial situation.