I’m a mortgage broker, and there’s something I need to tell you.

I run a busy brokerage, and I deal with a whole lot of customers every day. And I can say that without fail, most of them will call us up at some point and say, “What’s your interest rate today?”

What you need to know is that although mortgage loan interest rate is a significant factor in any loan, it is – by far – not the most important factor.

There, I said it.

What’s crucial to understand here is that there may be other loan products with higher interest rates that are actually better for you!

It sounds crazy, I know. So let me explain.

Just last week, I offered a customer the choice between a 30-year Federal Housing Authority (FHA) loan at 3.375 percent with $80 in mortgage insurance, and a 30-year conventional loan at 3.625 percent rate with $65 in mortgage insurance.

At first glance the FHA loan looks better. Less points, lower payments, right?

Not exactly. With the FHA loan, the $80 of mortgage insurance stays on for the full 30-year term of the loan; on the conventional loan, the $65 mortgage insurance is removed once the loan reaches 80 percent of loan-to-value.

Counterintuitively, that makes the conventional loan cheaper over the duration of the 30-year term, saving the customer thousands over years!

There are dozens and dozens of cases like this in the mortgage loan industry where the devil truly is in the details. Experienced mortgage brokers can help buyers navigate the pitfalls and avoid the obstacles hidden in any loan package. If you’re in the market for a mortgage loan, let my experience as a mortgage broker work for you – contact Co/LAB Lending today, and I will make sure you end up with the loan that’s right for you.

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