Today's Pennsylvania (Pa) Mortgage Rates
Comparison shopping for Pa mortgage loan rates
When comparison shopping for low rates on a Pa mortgage, you'll often see both an interest rate and an Annual Percentage Rate (A.P.R.) for each mortgage loan you see advertised in Pennsylvania. The A.P.R. is a good tool for comparing different mortgage loan rates, which will not only include the note interest rate but also different points and other terms. The A.P.R. is designed to represent the "true cost of a loan" to the borrower, expressed in the form of a yearly rate. This way, lenders can't "hide" fees and upfront costs behind low advertised rates.
While it's designed to make it easier to compare Pa low rate mortgage loans, it's sometimes can be very confusing because the A.P.R. often includes some, but not all, of the various fees and insurance premiums that accompany a mortgage. And since the federal law that requires Pennsylvania lenders to disclose both rates, the A.P.R. does not clearly define what goes into the calculation, A.P.R.s and low rates can vary from lender to lender and loan to loan and often do. To truly shop Pa mortgage rates effectively, you need the experience of a professiona
For instance, the Pennsylvania mortgage rates you see on a loan tied to a market index, like a 5/1 ARM, assumes the market index will never change. But ARMs were invented because the market index changes all the time and makes fixed rate loans cheaper or more expensive to make at different times-- that's why they offer variable rates in the first place!
Note when you're browsing for low Pa mortgage rates, the A.P.R. will not always tell you about balloon payments or prepayment penalties, or how long your low rate is locked. Also, you'll see that A.P.R.s on 15-year loans will carry a higher relative rate due to the fact that points are amortized over a shorter period of time.
So using APR's solely as a Pa mortgage rate comparison tool are at best ...inexact. The lesson is, that A.P.R. can be a guide to low rates, but you need a licensed Pennsylvania mortgage professional to shop the many options available to compare not only rates but terms tohelp you find the truly best low rate loan for you. Call us at 215-741-3131 and we'll be happy to help you compare your best loan possibilities. For instant information, please click our rate tool below.