How does the interest rate factor into the mortgage loan?
A lower interest rate allows you to borrow more money with a lower monthly loan payment. Interest rates can fluctuate as you shop for a loan, so ask-lenders if they offer a rate lock-in which guarantees a specific interest rate for a certain period of time. Remember that a lender must disclose the Annual Percentage Rate (APR) of a loan to you. The APR shows the cost of a mortgage loan by expressing it in terms of a yearly interest rate. It is generally higher than the interest rate because it also includes the cost of points, mortgage insurance, and other fees included in the loan.
