Interest Rate
Author: Terri Ewing
Published: September 5, 2008
Interest Rate Defined
Interest rate, also called the note rate, is the amount of interest charged on a mortgage expressed as a percentage. The interest rate is probably the one thing borrowers worry about the most when shopping for a mortgage. They scour the globe for the lowest interest rate. The lower the interest rate the lower your monthly mortgage payment. So, it is a very big deal.
But getting the best rate is rarely achieved by most mortgage shoppers. Since mortgage rates are also a mechanism to increase originator revenue, the shopper and the loan seller are at odds.
Mortgage shoppers are unaware of this relationship and, therefore, lose the battle before it’s fought.
The increased revenue from the loan seller arbitrarily increasing the mortgage rate goes directly to the company’s bottom line either at closing or when they bundle up the loans and sell them. So, they make money off you not only from fees but from increasing your interest rate.
To learn exactly how to originators make their money at your expense, charging higher rates than necessary, and how to stop it on your next loan, check out our Mortgage Advantage mortgage shopping method.
Author: Terri Ewing
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