It is very necessary for a person to be fully knowledgeable about the mortgage rates in Chicago to be able to differentiate between the interest rate and the APR. The interest rate is a rate that the borrower needs to pay when he goes to the bank or any Financial Institutions in order to borrow a certain amount. In short, it is basically the principal cash or loan amount as you may call it. Whereas, an APR is the annual amount of the loan. It generally includes any loan Fees that are due by the borrower. This makes the APR be of a higher value than that of interest rates.
The mortgage rates in Chicago are in two types fixed and flexible. Depending on the financial background of a person the person is able to select which rate they want to go for. However one need to understand that the rates are fluctuating and this makes it necessary for them to keep a check on the rates. A list of the rate is given below
· If a person goes for a 30-year tenure their rate will be 3.05
· If the borrower chooses a tenure for 15years, the rate in today’s time is 2.54
· The flexible rate for 5/1 is 3.3
Why does one need a discount point?
There are many reasons for a borrower choosing for the discount points. Some of them are as follows.
· If the borrower has decided that he is not going to stay in the house for which he has taken a Mortgage Loan more than a very short period of time it is much better to clear the loan.
· It also depends on how much the person has to pay at the time of closing the loan. The person needs to understand whether the mortgage rates in Chicago that he has taken are of a higher rate or not.
When a Mortgage Loan is given in the rate which is fixed on it for the interest is to be paid by the borrower within the stipulated time period. The rate of interest usually depends upon the amount that has been borrowed and the financial capability of the borrower. If one wants to lower the rate to some point, they can always pay a prepaid interest on the mortgage loans. These interests are usually used to reduce some percentage of the total mortgage rates in Chicago. This is known as a discount point.