Bank or direct lender for FHA?

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Would the Bank of America offered me Thet rate of 5.00, or directly lender [Van Dyk Mortgage] which offered 4.75 per FHA. A quarter of a percentage point to a big difference for a loan of 140,000 e I am both a pre-approved can not decide. Is it better to stick to a big bank? Thank you!

  1. Reply
    May 3, 2011 at 11:55 pm

    forget the interest rate and look at the APR..

    tells us the APR then we will give you an intelligent answer.

  2. Reply
    May 4, 2011 at 12:07 am

    Normally that is all a person look at is the interest rate of a mortgage loan. The interest rate plus the length (term) of the loan will determine the monthly payment.

    To properly compare one mortgage loan to another you would need to obtain the Truth In Lending (TIL) statement from both your lenders. The TIL would indicate the Annual Percentage Rate (APR) Now you are a able to determine which mortgage loan is better,since the TIL will tell you the cost of your loan to include all points, and fees for the first year of the mortgage loan.

    The higher the APR the more you are paying for your mortgage loan.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

  3. Reply
    May 4, 2011 at 12:39 am

    Although APR will indicate the real interest rate during the term of the loan, it does not indicate which loan will be better if you terminate the mortgage prior to the end of the term (refinance or sell).

    To determine that, you will need to know the origination fee, points, and all other fees that are applied to the loan. Only then can you make a informed decision as to which loan my be the best for your circumstance.

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