When shopping for a mortgage with a company like the one that Gregory Englesbe runs, a lot of people only pay attention to the interest rate. This is similar to trying to buy a car for the lowest amount of money and not paying attention to the car’s age, make, model, or condition. While you can find something that is going to be really cheap, it’s probably not going to be very good.
It works in the same way with mortgages. Just like with cars, there are a lot of factors that go into what determines the interest rate. One of the complicated things about mortgages is that the value of every mortgage has at least four parts. The first part is the interest rate. Fixed-rate mortgages have interest rates that do not change after you get your mortgage. Adjustable-rate mortgages have rates that are preset for a certain period of time, usually between one and ten years, and then change periodically.
The second part of every mortgage is the upfront charge that is usually a percentage of a loan amount. These charges are related to interest rates. The more you can pay upfront, the lower interest rate you can get. The third part is the origination fee. Fundamentally, this fee is just another upfront charge.
Finally, the fourth part consists of the third-party fees.
Gregory Englesbe is a member of the MBNA and PMBA, and is currently the CEO of E Mortgage Management.