Pennsylvania (Pa) Mortgage Rates

Comparison shopping for Pa mortgage 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.

Where the confusion comes in

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 ncludes 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 professional.

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!