The high and often hidden cost of low rates.

Discount points-

We have all heard the expression that nothing is free in life. Low rates are no exception. Many times, to give you a lower interest rate lenders will add discount points in the form of extra closing costs to your loan. This is called buying your rate down. It can take years to recuperate the savings so if you need to refinance again or sell the home in the near future you could cost yourself al lot of money as it can take years to break even on the monthly savings.

Missed opportunity-?

You may have the equity to pay off high interest debt such as credit cards or even an auto loan because the savings in interest from your current mortgage to this new one is not enough. I have seen cases where the borrower could have saved tens of thousands of dollars and put themselves years ahead financially but declined to move forward for this reason.?

Upfront cost-

The lender with the lowest rate might charge an application fee that you must pay out of pocket and if something goes wrong with your loan you very likely will your money back.

Term-

To get the rate you were looking for you may have to put yourself in a shorter term where the monthly payments are much higher now that extra cash is going towards your mortgage rather paying of more expensive debt or towards your retirement fund.

For most Americans their home is the biggest asset they will own in their life therefor if your lender is only pushing a low rate and not focused on helping you accomplish your long-term financial goals you may want to check the market and see who else is out there.?

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Benjamin Kell NMLS 2126313