I am pleased to report a change of author for this blog. From September 1, 2011, the new author will be Mary McLean of Sutton Group Lethbridge. Mary offers the same level of expertise in real estate as myself, with a similar level of experience. Mary can be reached by calling 403 320-6411 or emailing her at:- info@teammiller.ca, or mmclean@sutton.com
For more information contact:
Mary McLean
Sutton Group Lethbridge
1010 3d Ave., South.
Tel: 403 320-6411
Mortgage APR vs Interest Rate: What Should You Go For?
When you’re shopping around for a mortgage loan, comparing loan offers from different lenders can become an intimidating task. The interest rate (also known as the note rate) that is applied by the lenders to work out your monthly payment is just a portion of the total cost of a mortgage. This is the reason why it becomes so confusing for the borrowers to compare mortgages when they only take the interest rate into consideration. A better technique of comparing mortgage loans is the mortgage APR or Annual Percentage Rate.
The Mortgage APR Formula
The mortgage APR formula merges the interest costs of a loan with other charges required by a lender for the duration of the loan. Mortgage APR is expressed as a yearly rate. Hence, Mortgage APR lets you know the actual cost of borrowing and is a better tool than interest rate to compare loan offers. Borrowers can use it as a helpful yardstick.
The Truth in Lending Act
The Truth in Lending Act necessitates lenders to clearly mention the APR on the advertisements of their loan products. It is typically stated just after the note rate. The goal is to stop lenders from advertising cheap interest rates to attract consumers and at the same time, covering fees.
Limitations of APRs
Though comparing APRs is more helpful than just comparing the interest rates while looking at various mortgage offers, it has some limitations:
Some upfront fees are not incorporated in the formula – like credit report fee, home appraisal fee and title fee. These fees might differ from one lender to another. You should remember to request your lender for a Good Faith Estimate for closing costs and question them to know which ones are not included in the APR.
Mortgage APR is handier for fixed rate mortgages than adjustable rate mortgages. As nobody can forecast how interest rates would vary with time, the APR for adjustable rate mortgages is calculated on the basis of predictions, which might prove to be incorrect.
The APR takes for granted that you would bear the loan for its entire tenure, which might be 30 years, however, only a small number of homeowners hold a mortgage for such an extensive period. If you intend to refinance within 5-7 years, a loan with bigger upfront charges can land up being costlier than what its APR implies.
This information is brought to you courtesy of Max Harper – Visit Max’s web site at http://www.mortgagefit.com/apr.html or email Max at maxharper2@gmail.com
For additional information about Lethbridge Alberta Real Estate, please view my primary web site www.TeamMiller.ca, or contact me at 403 329-0479, email: info@TeamMiller.ca.
Don’t miss this super duplex, ideal for first time buyers, students or investors. Deceptively spacious with 1300 sqft developed. Large open floor plan with great kitchen and plenty of room for the whole family. Features include living room with gas fireplace and spacious dining area. New carpets throughout, good sized yard and convenient location to U of L, shopping and schools. On bus route. This property is a must see.
View more photos and information about this home at:
http://www.teammiller.ca/listings.htm
Please call Allan Miller today for details or a personal showing, 403-320-6411.
For more information about buying or selling Lethbridge Real Estate, please view my primary web site www.TeamMiller.ca or e-mail me at info@TeamMiller.ca
This information is brought to you by Allan Miller of Sutton Group Lethbridge.
I have never used my blog to feature a home before, but this one is a honey, and well priced for Riverstone.
A quick run-down of the features of this new listing are:
Immaculate energy efficient Riverstone Bungalow. Fully developed with Bright open floor plan, tiled foyer, cathedral ceilings, spacious living room, large kitchen, rear deck, 4 spacious bedrooms, master has walk-in closet and stunning 5 piece ensuite, family room, central air, double attached garage, lane access, room for RV parking.
Additional details and a virtual tour are available at the following page of my primary web site:
www.TeamMiller.ca/234/index.htm. Call Allan at 403 320-6411 to view today! MLS. $349,900.
Stan Mills, President of the Lethbridge and District Association of Realtors, recently made the following statement in the Real Estate Insight magazine:
“The sales statistics for the end of February indicates that sales are meeting and exceeding the numbers for this time last year, just as we are gearing up for a busy construction season and indicators show that the average sale price will continue to increase by 5 to 8% this year”.
Projections are never absolute, but Stan is a long standing broker in Lethbridge, and a respected real estate instructor at the Lethbridge College. I feel that 5 to 8% is realistic.
The recent sale of over 700 apartments in Lethbridge, is already causing controversy. They were bought by an Ontario company, and about 150 are to be sold as private dwellings. It goes without saying that an already tight rental market will be severely affected, especially as Lethbridge University continues to grow.
If you are interested in buying or selling real estate, or would like to search Lethbridge MLS homes for sale, please view www.TeamMiller.ca, or contact Allan Miller of Sutton Group Lethbridge at (403) 329 0479.
Lethbridge Real Estate 