Longwood real estate and mortgage rate shoppers - beware.  When it comes to low mortgage rates, you can’t always believe what you read in the papers, get in your mailbox [as you go through your mail standing over the garbage can] or hear on TV. Or, for that matter, what you see in official looking graphs!

A terrific example is the chart at right.  Published by Freddie Mac, it shows the 30-yr fixed mortgage’s “going rate” by the nation’s mortgage lenders.

On December 30, 2008, that rate was 5.1 percent.

But 5.100%  is only 1/2 of the information that matters.  There’s a mandated fee schedule that accompanies the Freddie Mac-reported rate survey.

Currently, the published fee required to get a 5.100% mortgage rate is 0.7% of the borrowed amount, this equates to an additional cost of  $700 for every $100,000 that you borrow. 

Kinda important isn’t it?

This fee is more commonly known as “points”.  Points in and of themselves are not bad, in fact, they can be very useful at times.

But here is the interesting part that you can’t see in Freddie Mac’s graph ere.  Versus last year, the amount of the fees has nearly doubled from 0.4 points.  Same rate, double the points?  How can those items be on the same chart?  Wouldn’t you need to keep a constant in order to compare apples to apples? [Or here in Seminole County Florida's case -oranges to oranges?] =0)

So, yes, conforming mortgage rates are low and they have fallen near all-time lows but there’s more to the story than just the interest rate — there are the fees that go with them, too.

Mortgage rates and loan fees often move in opposite directions so to get lower rates, consider paying additional points. Conversely, to face fewer fees, accept a higher rate. It’s a trade-off and there is no magic.  If your loan officer tells you there IS magic - find a different one. [Preferably a Certified Mortgage Planning Specialist.] If you would like me to review your scenario to see if can be one of the many right now that are getting a Longwood refinance and saving hundreds per month, connect with me.  Here is how:

• Call me at 407 377 0500 x 210
• or you can email me
• Start Longwood refinance application
• Check out my Longwood Mortgage Site

(Image courtesy: The Wall Street Journal)