(505) 836-5700

Give Us A Call

(505) 836-5700

click to call

The Hidden Costs of Unusually Low Mortgage Rates

Tuesday Sep 13, 2016
Rate this item
(0 votes)

Almost daily, our staff at Indigo Mortgage receives calls from new and existing borrowers saying they have seen really low rates advertised and want to know if we can match those rates.

The first thing we tell them is that we can give them any interest rate they wish-- BUT what are they willing to pay for that rate and what are they willing to compromise? Those details are not advertised by the national or online lenders, but they are a factor in every single mortgage loan.

For example, we most often find that a really low rate being advertised is actually an adjustable rate mortgage or ARM, but these national or online lenders don’t offer up that information-- and it might not be a type of mortgage that the borrower wants.

Another common situation is that the rate being quoted is a 30 year fixed rate but the points attached to buy that rate down can cost the borrower many thousands in fees. Again this is usually not disclosed upfront from these lenders.

We also find really low rates being quoted are actually for 10 or 15 year terms, well below the traditional 30 year rate, another factor that most borrowers do not want since their monthly payment will be substantially higher.

At Indigo Mortgage, we urge homebuyers to be very careful responding to those low mortgage rates before jumping in to a loan through a national or online lender. Make sure to ask if it’s a fixed rate and if there are any points or fees associated with that low rate and what are the terms. And as always, shop that mortgage around! It’s really important to get a second opinion to see if what sounds like a very low mortgage rate is really the best option for financing your home’s mortgage.

Indigo Mortgage is a locally owned and operated company, serving homebuyers in Albuquerque, Rio Rancho, Santa Fe and all across New Mexico. For questions about selecting a mortgage lender, contact Indigo Mortgage in Albuquerque at (505) 836-5700. Indigo Mortgage offers five mortgage divisions including Residential, VA Loans, Reverse Mortgages, Construction and Commercial. They are licensed by the Nationwide Mortgage Licensing System (NMLS #188348), and can provide loans anywhere in New Mexico.

Read 760 times
Was this content interesting? Please help us out by sharing this! Your 'like' will make us smile!