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Is comparing APRs typically the best way to decide which lender has the lowest rates and fees?
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Is comparing APRs typically the best way to decide which lender has the lowest rates and fees?

You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that's best for you. Look at total fees, possible rate adjustments in the future if you're comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage. 

Also, unfortunately, the APR doesn't include all the closing fees and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though you'll probably have to pay them. Lastly, don't forget that the APR is an effective interest rate–not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.

 

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What is an “Interest-Rate Cap” with an adjustable rate mortgage?
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What is an “Interest-Rate Cap” with an adjustable rate mortgage?

An interest-rate cap places a limit on the amount your interest rate can increase or decrease. There are two types of caps:

1. Periodic or adjustment caps
Periodic or adjustment caps limit the interest rate increase or decrease from one adjustment period to the next.

2. Overall or lifetime caps
Overall or lifettime caps limit the interest rate increase over the life of the loan. As you can imagine, interest rate caps are very important since no one knows what can happen in the future. All of the ARMs we offer have both adjustment and lifetime caps. Please see each product description for full details.

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What determines how the rates in an adjustable rate mortgage change?
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What determines how the rates in an adjustable rate mortgage change?

Index 
Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indexes is published weekly in the Wall Street Journal. If the index rate moves up, so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease. 

Margin 
To determine the interest rate on an ARM, we'll add a pre-disclosed amount to the index called the "margin." If you're still shopping, comparing one lender's margin to another's can be more important than comparing the initial interest rate, since it will be used to calculate the interest rate you will pay in the future.

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Can I change a lock-in agreement?
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Can I change a lock-in agreement?
Once your lock-in rate is accepted, your loan is committed against other transactions. Therefore, we are not able to renegotiate lock commitments.
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How long does someone typically have to close on their mortgage before a rate lock-in expires?
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How long does someone typically have to close on their mortgage before a rate lock-in expires?
We currently offer a 45-day lock-in period on mortgages. This means your loan must close and disburse within this number of days from the day your lock is confirmed by us.
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Is there a fee to lock in an interest rate?
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Is there a fee to lock in an interest rate?
We do not charge a fee for locking in your initial interest rate.
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What is a Lock-In Agreement?
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What is a Lock-In Agreement?
A lock is an agreement between the borrower and the lender that specifies the number of days for which a loan’s interest rate and points are guaranteed. Should interest rates rise during that period, we are obligated to honor the committed rate. Should interest rates fall during that period, the borrower must honor the lock.
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What is your Rate Lock Policy?
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What is your Rate Lock Policy?
The interest rate market is subject to movements without advance notice. Locking in a rate protects you from the time that your lock is confirmed to the day that your lock period expires.
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When can someone typically lock in a mortgage interest rate?
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When can someone typically lock in a mortgage interest rate?
You may be able to lock in your interest rate after your loan application is received and your credit report has been reviewed. Once your information is complete, a Mortgage Lender will contact you and you'll have the opportunity to lock in your rate at that time.
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How are interest rates determined?
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How are interest rates determined?
Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.

 

 

These questions and answers are provided for general information only and may not be completely accurate in every situation. The information provided is not legally binding on MutualBank or any of its affiliates or subsidiaries. For assistance with specific questions regarding your account(s), please contact us.

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