Must-knows about mortgage rate/fee combos

Don't assume loan officer has your best interest in mind

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Editor's note: This is the second of a two-part series. Last week I discussed a new integrated calculator on my website that uses current and personalized mortgage price data to help borrowers select the type of mortgage that would minimize their net costs. This article introduces a second integrated calculator that helps borrowers select the best combination of interest rate and lender fees on their preferred type of mortgage. Before describing this new approach, it is instructive to consider how the rate/fee combination is selected now. Lowest rate used to solicit naive borrowers Naive borrowers know that mortgages carry an interest rate, but they don't know that the rate varies with the amount of total upfront fees. They are thus vulnerable to solicitation from lenders and lead generation Internet sites promising the lowest rate.While the lowest rate carries the highest fees, the fees are not disclosed. The annual percentage rate (APR) must be disclosed, and will be mu...