Showerthought: I learned to break down loan costs, but my friend says rate is all that matters.

Do you pore over every fee or just go for the lowest rate when picking a mortgage?

3 comments

3 Comments

So how long do you really think you'll be in that house? I got a slightly higher rate with no points on my place because I knew we'd move for my wife's job in like 5 years. My cousin went for the super low rate but paid a ton in points, and then his job moved him after 3 years. He basically lost money. You gotta run the math on the total cost for your own plan.

avery_hart6316d ago

Wait no, your friend is way off. The rate is super important, but all those fees get rolled into your total cost too. I mean, a low rate with huge upfront points isn't always the better deal.

betty_scott1816d ago

@avery_hart63 makes a good point, but from what I've seen, locking in a low rate is often better than worrying about fees. It's all about how long you keep the loan. Many people end up paying more over time with a slightly higher rate.