Charlotte NC|Mortgages, Rates And Terms: Best Rate? or Best Value? Ask The Broker- Mortgage FAQ’s
February 14th, 2008 Categories: FAQs About Charlotte
The Best Deal?? What everyone wants right? So that means the Best Rate, doesn’t it? Does it? Is it the best rate or best value I am looking for?
by Olan Carder, Loan Officer, Myers Park Mortgage
I have been helping people finance the “American Dream” for over 10 years. Over the years, something has started to stand out as being very odd to me. When home buyers are shopping for a home or mortgage, they typically get very focussed on one or two key issues. They get what I would describe as tunnel-vision.
Everyone wants to feel like they found the best deal. I am sure you feel that way too, but sometimes the way we go about finding the “best deal” might actually hurt our chances of finding the “best value”. Say What? That’s right, read on! Have a look at this:
VALUE = Benefits - costs
For example, a $200,000 home in an appreciating area might be a much better value than a similar $180,000 home in an area that is seeing home prices stay flat. A mortgage loan at 6% might be a better value than a mortgage at 5.5%, given other factors. I see many potential homeowners get hung up on cost, or area, or PMI, etc… but they lose track of the big picture- which in mortgages is the total cost, before and after taxes. 
This has a great application to your mortgage! I prepare a Total Cost Analysis for my clients that details several loan options compared over time. Notice the word “TOTAL” comes before the word cost. I am sure many of you reading this blog have heard of “No Closing Cost” loans, but I assure you, like the fabled snipe hunt, that animal does not exist. Every loan has costs… either in the interest rate you pay each month or in the form of up front fees. The key to achieving the best value is comparing the total cost of the options you have over time.
Where do you see total costs? On a Good Faith Estimate of Closing Costs. Demand one. And how do you compare a 6.25% with “no closing costs” loan to a 5.5% loan with a 1 point origination fee? You compare APR’s, Annual Percentage Rates of the loans side by side- these factor in all closing costs and rates to yield the true cost of the loan.
Then, consider whether you need more tax breaks now or later, talk to your accountant, and go get that loan and home.
Olan Carder 
LIFE Changing Advice!
Myers Park Mortgage
Office: 704-971-6193
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A related post- South Charlotte Homes For Sale and Appreciation Report.Most folks like pictures, and I like taking them, so I’ve published more than 1500 pictures
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