Always ask your mortgage lender about origination and discount points to make comparing mortgage offers easier. Mortgage rates are still at historic lows, but all lenders are not equal in how they offer those low rates. It’s important to not only get the best or lowest interest rate available but more importantly to know what it costs to get that low rate.
If you’re refinancing a mortgage or getting a new home loan, the most effective question to ask your lender is, “What is it costing me to get the rate you are offering?” More specifically, ask what the origination and discount fees are that they will charge. If you can get the lender to disclose those two fees, origination and discount, then you can easily compare offers between lenders.
If two lenders are offering the same interest rate but one has higher origination and discount fees, then it’s easy to choose the better offer. Remember, any fees outside of origination and discount fees are going to be exactly the same for all lenders as those will be title and escrow account charges.
Some shady loan officers will charge higher origination and discount fees but manipulate the title and escrow fees to make their offer look better, but at the closing, borrowers can be in for a big shock when the title and escrow fees are back to what they should always have been.
Remember the only fees you want to compare are origination and discount fees. If you have questions about a mortgage loan offer, call Indigo Mortgage – we’re here to help.