Be a Financially Savvy Homeowner: Is Knowing Your Mortgage Rate Important?

MortageOne in seven mortgage holders in the U.S. have zero knowledge of their interest rate, a recent study conducted by Bankrate.com shows. Let’s hope you know yours.

When getting a loan on your house, it pays to be smart about your money. After all, it’s one of the most important decisions you’ll ever make. In Utah, there have been many changes in mortgage programs, and being familiar with them can help you make wise choices.

Sure, searching for the ideal property for your family is already stressful and frustrating. But that doesn’t mean that you can just forget about other important things.

As Utah Loan Pros — Primary Residential Mortgage, Inc. explains, “In the past it was common for a financial institution or a lender to only have two mortgage loan options that were offered to their clients. People choose between a fixed rate loan that had payments spread out between a 15 or a 30-year time frame or an adjustable rate loan. Today, however, there is a wide variety of Utah loan programs to choose from and because of this seemingly endless number of options is difficult for people to truly understand exactly what their loan is.”

According to a survey, mortgage interest rate is an important number. Therefore, you need to understand your loan contract before signing.

Here’s why:

You Could End Up Paying More

The interest rates have a significant impact on what it costs to buy the property you want than the actual price. When applying for a loan, don’t just focus on how much you have to pay every month. Always do the math; figure out what makes up that monthly payment, so you can clarify things with your lender.

To Know When to Apply for a Refinance

If you’re planning to refinance and use record low rates to your advantage, you should know your exact mortgage rate. If you only know it’s somewhere in the 2’s or 3’s, it might be a problem. That decimal point means a kit when it comes to home loans.

As the interest rate of home loans can hugely affect your financial situation, it’s important to be a savvy homeowner. Determine what your loan is, know how much you’re going to pay, and ask how long it will take.