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The Right Questions

Monday Jun 19, 2017
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When you’re shopping for a mortgage, it’s important to do your research and ask the right questions. The lending experts at Indigo Mortgage have seen many people opt to purchase a mortgage loan simply because of the low rate, without considering what it’s costing them to get that low rate. It’s important to recognize that a low rate doesn’t always translate to saved money.

The key question to ask is “What are the origination and discount points (or fees) for the rate my lender is offering?” In many cases a lender may give you discount points, but leave out important facts about your origination fees, or they might give only origination fees, but leave out the discount. It’s important to have both pieces of information, because essentially, when you add the origination fees and discount fees together, you get what it costs to obtain a certain rate.

To illustrate, say two different lenders are offering the same rate of 4.125% on a 30-year mortgage. The origination fees and discount fees with lender A are $4,500, whereas the origination fees and discount fees with lender B add up to $895. Lender B would be the right choice.

Indigo Mortgage believes that shopping around and learning about all of your options is necessary if you want to save money and find the best loan option for your circumstances. Working with a local broker like Indigo Mortgage can save you time and money in your search.

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.

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