Question 1

How do I compare different loan options?

Accepted Answer

Compare total cost over your expected ownership period, including monthly payments, closing costs, and total interest. A lower rate isn't always better if closing costs are significantly higher.

Question 2

Should I choose a lower rate or lower closing costs?

Accepted Answer

Calculate the break-even point. If you'll stay past break-even, choose the lower rate. If you might move or refinance sooner, lower closing costs may be better despite a higher rate.

Question 3

What's the difference between APR and interest rate?

Accepted Answer

The interest rate is the cost of borrowing. APR includes the interest rate plus fees and closing costs, giving a more complete picture of total loan cost. Use APR to compare similar loans.

Question 4

How do points affect my loan comparison?

Accepted Answer

Points (1 point = 1% of loan amount) buy down your rate. Paying points makes sense if you'll keep the loan long enough to recoup the upfront cost through lower monthly payments.

Question 5

Should I compare NON-QM to conventional loans?

Accepted Answer

If you qualify for conventional financing, compare both options. NON-QM rates are typically 0.5-1.5% higher, but may be your only option if you can't document income traditionally.

Loan Comparison Calculator

Loan Comparison Calculator FAQ