One of the most common things that borrowers ask lenders is what their rates will be. The rates a lender has is very volatile, it is not always the same. So the lender will always have to wait via fax, E-mail or a secure website for the rate sheet that comes from their company. Because it is volatile the rates could even change 5 times in one day. As a borrower you have no right to see the rate sheet, this is basically the advantage or a way for the lenders to do the business. The rate sheet will always show the interest rates and the cost expressed in points. A point is equal to one percent of the loan.
The cost of the rate usually vary depending on the interest rates, higher rates are cheaper compared to lower rates. This is done because it helps the lender to earn more over the interest for the period of the loan, so lenders charge less cost. When customers want a lower interest rate, they are charged with higher cost because lenders will earn fewer in the longer period of the loan.
The point system would usually work in this way: Zero points mean par value or pricing. The numbers in parenthesis means premium or rebate. Premium or rebate means that the money...
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