By the time you read this article everything will have changed. One thing is certain about the mortgage banking industry and that is change. Do not take this as a smack on the face because it certainly is not intended to be but it should be somewhat of a wake-up. The truth is the far above average home owner and real estate investor are not capable of properly answering this question. We, and I include myself, make the terrible mistake of thinking if we know a few terms about something that we understand it well enough to make important decisions. Most people are not capable of making wise or even correct mortgage decisions. The frightening part is most loan officers also do not have any idea how to really determine if a certain mortgage is the best for you.

Be not dismayed: Even financial planners are often wrong with their advice.

So, am I the genius to answer the question? No. But I will give you a little more information than you probably already had to help you make the best possible decision you can make for yourself, your family or your investment strategy. More than that this may help you avoid “tricks” used by the so-called “no closing costs” providers. By the way, “no closing cost home loans” do not exist. There is no such thing as no closing costs. There are always closing costs and one way or another you always pay them. Repeat that to yourself: there is no such thing as a loan with no closing costs. If you refuse to believe that you are beyond help and get everything you deserve. (I write that with a sideways smile.)

There is a long standing argument among many people as to which is more important between interest rates and monthly payments. The bottom line is: nobody can answer for you. They can pontificate for weeks but ultimately it is your decision. So let me direct this to you about the difference between interest rates and monthly payments and how this could become an issue.

Most people automatically assume that if you have a lower interest rate you will have a lower monthly payment. They also often assume, and to their detriment, that a lower payment or lower interest rate may be the best loan. Neither is true and both are true but the paradox is simple to decode. FOr example a fifteen year mortgage has a lower interest rate but a higher monthly payment. A forty year mortgage has a higher interest rate but a lower monthly payment. So which best fits your goal?

For today I can actually offer a loan to the right buyer for 4.75% with no discount points. This loan has an APR of 4.893 which is still phenomenal. What you, Mr. or Ms. Borrower, need to understand about numbers like this is this is not *your* number. In fact it is the best case scenario number. Your rate may in fact be much higher from any and every lender -not just us. There are “hits” to rate and adjustments to pricing which are, in part, dictated by Fannie Mae or Freddie Mac. Those are called Loan Level Pricing Adjustments and they are based on the risk presented to FNMA or FHLMC by the borrower, the property and the type of loan.

If you and I were on the golf course and you asked, “Ken, is this a good time for me to refinance?” If I did not start my answer with, “What are you trying to acheive?” I would be a fool to answer. This may be a great time for you to refinance you loan with interest rates as low as they are today but this may be a horrible time for you to refinance if you are living in a home with an upside down mortgage, you have had a change in careers or an income drop, your debt-to-income ratio is off the charts or any other number of reason. Now, if you are one of the few who qualifies for the advertised rate and you have equity in your home (which you would to qualify for that rate) then yes, this is probably one of the best times in recent history to refinance in to a long term fixed rate mortgage.

Call me and let me be honest with you. We can refinance your Fannie Mae loan in Georgia or Florida and your FHA loan anywhere in the southeast. 866-946-0120