Demystifying the 5 year fixed rate mortgage

If this title alone does not get you I don’t know what will. Most people opt for the 5 year fixed rate mortgage because of the security of knowing what your payment will be from month to month over the next 5 years. However how do you know if you got the best 5 year product. In case you did not know there is more than one out there.

Lender’s price their fixed rate products based on how long that they have to guarantee the rate. These rate guarantee’s range from 30 days all the way up to 120 days. So as a result the quicker you can close the more likely you will get the best rate in town.

Here are a few examples.

30 day close at 3.89%, 45 day close at 4.04%, 60 day close at 4.14%, 90 day close at 4.19% and 120 days at 4.24%. * Some rates may not be available, as lenders change their rates without notice.

People who are refinancing will always be able to get the lowest rate. However when you buy, you should know the options out there before you pick your closing date, as the right one could save you big bucks.

As always contact me if you have any questions.