A Lower Rate Can Have an Upfront Price

A mortgage advertisement can make one rate look like the obvious winner. Before a veteran buyer chooses it, the next question should be: what does that rate cost to obtain?

Ask what is included

Discount points are an upfront charge connected to a lower interest rate. Rate-related lender credits generally work in the other direction: lower upfront cost in exchange for higher interest. Ask the lender to identify which tradeoff is built into the offer.

Use your likely timeline

A lower payment may be useful, but recovering a larger upfront expense takes time. Ask for comparisons over different periods you might keep the loan. Do not build the decision around a refinance that has not happened.

Make the comparison readable

Put the loan amount, term, points, lender credits, estimated payment and cash to close next to each other. If a number is missing or based on a different assumption, ask for clarification before calling one offer better.

Bring the home decision back in

The financing conversation should support your move, not distract from whether the home fits. Ready Front can help organize the property search while your lender explains the cost and risk of each loan option.

Talk through your veteran homebuying plan with Raoul Rowe, Broker-Owner and Army Veteran. (737) 210-1690.