COMPARE WITH CONFIDENCE
Mortgage rates & closing costs
Compare the rate, fees, payment, and time you expect to keep the loan. Our team can shop available options through Barrett Financial Group LLC.
Request a personalized rate comparisonThis educational page does not display live rates. Your quote depends on your scenario, available programs, and market conditions.
How should borrowers compare mortgage rates and costs?
Compare mortgage offers using the same loan amount, term, property assumptions, and rate-lock timing. Faulkner Financial Group helps borrowers evaluate interest rate, APR, points, lender credits, and total costs through Barrett Financial Group LLC, NMLS #181106. A lower rate can require higher upfront costs; compare written offers and consider how long you expect to keep the loan.
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Interest rate versus APR
The interest rate determines the interest charged on your loan balance. APR (annual percentage rate) is a broader annualized measure that includes interest plus certain loan charges, such as points and broker fees. APR is often higher than the interest rate; it does not include every cost of homeownership.
Use APR alongside the payment and fees. It is not your note rate or a prediction of your personal cost if you sell or refinance early. Compare similar loan structures; an adjustable-rate mortgage's APR does not show its maximum possible rate.
Points, zero points, and lender credits
| Option | What changes | Question to ask |
|---|---|---|
| Discount points | Pay upfront for a lower rate. | How much does the payment fall? |
| Zero discount points | No upfront rate-buydown charge; other fees may remain. | What are the total closing costs? |
| Rate-related lender credits | Typically accept a higher rate to offset closing costs. | What extra payment buys that credit? |
One point costs 1% of the loan amount: on a $300,000 loan, one point is $3,000. There is no universal rate reduction per point. Ask for actual pricing with and without points. Lender credits can also arise for reasons unrelated to rate; ask how your specific credit works.
A simple break-even example
If an option costs $3,000 more upfront and saves $75 monthly, simple break-even is $3,000 ÷ $75 = 40 months. Selling or refinancing sooner may prevent recovering that extra cost. This hypothetical comparison excludes the time value of money, tax effects, and differences in remaining loan balances.
Compare Loan Estimates side by side
- Match the scenario: loan amount, term, loan type, points or credits, and lock period. Compare quotes from the same day when possible.
- Check page 1: rate, payment, mortgage insurance, escrow, and lock status.
- Review page 2: origination charges in Section A, required services in B, lender credits in J, and cash to close.
- Check page 3: APR and the five-year comparison. Subtract principal paid from the total shown to compare five-year interest and fees.
Compare taxes, insurance, prepaids, and escrow assumptions consistently. A smaller estimate for these items does not necessarily mean cheaper financing. Ask how costs change over your expected holding period and whether prepayment penalties apply. Different disclosures may apply to HELOCs and business-purpose investment loans.
Let us help compare your options
Share your goals and timing. We will arrange a secure way to review Loan Estimates; do not send sensitive financial documents through the website chatbot.
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Sources: CFPB interest rate and APR, points and lender credits, and comparing Loan Estimates.
Educational information only. Not a rate quote, approval, or commitment to lend. Pricing and eligibility depend on the lender, program, property, borrower, and market conditions.
Content updated · Published by Faulkner Financial Group LLC. Contact Jindra Faulkner, NMLS #225020, with content questions.