Interest Rates And Other Fees Affect The Total Amount Owed On Your Home Loan

Interest Rates And Other Fees Affect The Total Amount Owed On Your Home Loan

Often times the interest rates and other fees that are added to a mortgage loan amount can be confusing, and a bit of a shock, especially to the first time home buyer.  Below is a quick overview of the cost of obtaining a mortgage loan.

Interest Rates

When you find out the loan amount you are approved for, your mortgage lender also quotes you the interest rate you will be charged on that loan amount which impacts the total cost of your loan.  Consider the interest rate as a "rental fee".  Let's say I rent you the use of my pressure washer which I charge you a daily fee for, and also expect you to return. When you are finished using my pressure washer, you return it along with the total fee I charged you.  Borrowing money through a mortgage is basically the same. The amount you need for a mortgage is loaned to you, you are charged an interest rate for using that initial amount, and the lender expects to get the initial loan amount back plus the interest that has accumulated over the term of the loan.

The higher the interest rate that is set (the "rental fee" for the money), the more interest you will have to pay, and in the end, more money you will have to borrow.

Lender and Broker Fees

In addition to the interest rate, there are also lender and broker fees that are due at closing.  These are the costs associated with that particular lender and are itemized for you on the Good Faith Estimate (GFE) that your mortgage lender is required to provide to you.  These fees should be considered and evaluated when you make a loan decision.

APR

The Annual Percentage Rate (APR) includes additional fees or costs associated with a loan and is a better way of determining the total cost of a mortgage than its basic interest rate.  The additional fees associated with the loan are disclosed on the GFE and the APR will be shown to you on a disclosure called the Truth in Lending Disclosure. The Truth In Lending Disclosure will include what your interest rate is, the APR, and the total cost of all your payments.

The interest rates, the lender and broker fees, and the APR is a good way to compare the overall cost of your loan. If you have any questions about the rates or fees associated with your loan, do not hesitate to ask your loan officer to provide an explanation.  



Susan Florsch Headshot
Author:
Phone: 817-733-7791
Dated: October 29th 2015
Views: 1,191
About Susan: After relocating to the DFW area over 10 years ago, I have lived between Fort Worth and Arlington,. ...

Property Search








RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

Our Bloggers

Alan Oliver - 7
Allen M. Solhjoo - 4
Amber Johnson Oputa - 13
Amy Jo Saenz - 3
Ana Cantu - 1
Andrea Trimble - 55
Angela Taylor - 1
Angela Cotten - 102
Ann Kessel - 4
Ann-Marie Pope - 2
Annette Bruen - 47
Ashley Lambert - 1
Audra Young - 1
Belinda Duff - 5
Beth Herr - 1
Beverly Bryant - 24
Blake Marion - 3
Bob Cardillo - 4
Brittany Duey - 1
Bryce Smith - 5
Candace Mozingo - 1
Candie Hernandez - 10
Cara Balderas - 73
Chad Gabriel - 58
Christina Gonzalez - 5
Christine Shannon - 30
Christine McGinnis - 1
Christopher Evans - 1
Chuck May - 1
Clint White - 2
Comprar Casa DFW * - 4
Dakota Joyner - 10
David Darty - 1
Debbie Zurita - 17
Debbie Viverito - 132
Derek Taylor - 5
Diane Velez - 18
Drew Spears - 8
Edwin Liddie - 1
Erica Taylor - 54
Eunice Pettaway - 1
Eva Duffy - 8
Felicia Johnson - 79
Gary Hutchings - 20
Go 2 Girls Realty - 173
Greg Cunningham - 2
Gregory Cornett - 2
Heather Feragotti - 8
Holli Paddio - 3
Hunter Howard - 1
Jamie Brannagan - 2
Jason Todd - 24
Jemi Khan - 26
Jenna Stanley - 9
Jennifer Flynn - 9
Jennifer Boyd - 2
Jessica Boozer - 18
Jill Elliott - 99
Jimmy Hanks - 1
John Priestash - 60
Judy Tapscott - 2
Julian Taylor - 17
Julian Dozier - 4
Julie Nicholson - 10
Julie Cash - 3
Justin Blackburn - 1
Karla Terrell - 2
Kaysone Orlando - 1
Keisha York - 30
Kelley Stubbs - 3
Kelly Rumney - 9
Kevin Taylor - 16
Keyatta Johnson - 2
Kristen Henderson - 18
Kristine Edens - 3
Laneal Ernest - 9
Larry Frassinelli - 6
Leah Ecob - 15
Leigh Klotz - 5
Linda Scardis - 4
Lisa Carroll - 3
Lisa Cardillo - 53
Lucina Cervantes - 11
Marcos Garza - 1
Maria Lopez-Jones - 1
Mark Mulch - 19
Mark Fischer - 2
Marla Johnson - 1
Martina Worley - 2
Mary Taylor - 15
Melodie Sulgrove - 1
Michael Chatman - 2
Michele Thompson - 6
Mimi Rader - 1
Missie Craig - 12
Moira Brunken - 18
Monica Solkhon - 1
Naddia Morales - 10
Nick Walton - 79
Nikki Okpuzor - 5
Olivia Borowski - 1
Rachel Walsh - 2
Ramon Bermudez - 4
Rene Sinclair - 27
Rhonda Borgne - 1
Richard Mikus - 1
Rodrigo Sotomayor - 16
Rosalia Tejeda - 1
Roxann Hailey - 4
Sandy Setliff - 226
Sarah Dieter - 9
Sean Moniri - 21
Seana Taylor - 217
Shalee Garza - 10
Shelby Smith - 3
Shelia Randolph - 33
Spring Weeks - 9
Stacy Lynn Massar - 27
Steve Murray - 1
Susan Florsch - 12
Tami Bennett - 45
Tammy Gill - 1
Teneka Ray - 1
The Doyle Team * - 5
Tim Stoll - 52
Timothy Taylor - 1
Timothy Gilliam - 2
Trenton Johnson - 15
William Hurd - 3
William Graves - 5
Wilma Goodwin - 2

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

JP And Associates REALTORS
6136 Frisco Sq Blvd, #200
Frisco, TX
972-375-9448
0