Key takeaways
- APR, not just rate, reflects points and fees—compare total cost.
- A 0.25% APR difference ≈ $40–$60/mo per $250k borrowed.
- Soft-pull pre-quotes let you shop without credit dings.
- Lock windows (30–60 days) matter in fast-moving markets.
1) What lenders actually look at
Your rate is mostly driven by credit band, LTV (down payment), DTI, property type, and occupancy. Improve any one of these and your quote can drop meaningfully.
“Every 5% more down payment lowers risk—and usually the rate. But don’t drain your emergency fund to chase a tiny APR change.”
2) Rate vs APR (and points)
APR includes points and fees; it’s the best apples-to-apples metric. Points typically cost 1% of the loan per point and may buy down 0.125–0.25% on rate.
When points make sense
- You’ll keep the loan > 5–7 years
- Cash is abundant; liquidity isn’t an issue
- Break-even < your expected time in home
When to skip points
- You plan to refi or sell soon
- Emergency fund < 6 months expenses
- Break-even is too far out
3) How much house can I afford?
A quick gut-check: target a housing DTI ≤ 28% and total DTI ≤ 43%. Taxes, insurance, HOA, and PMI can swing this—price your payment, not just the home.
| Scenario | Loan | APR | Est. P&I |
|---|---|---|---|
| Conventional, 20% down | $400,000 | 6.25% | $2,462 |
| FHA, 3.5% down + MIP | $485,000 | 6.10% | $2,940 |
| 15-yr fixed, 20% down | $400,000 | 5.90% | $3,356 |
Want your exact range?
Soft pull. 2 minutes. Multiple real offers.
4) Avoid these junk fees
Request an itemized estimate and watch for “processing,” “courier,” “verification,” or duplicate admin fees.
- Underwriting & origination stacked together
- Excessive “verification” or “doc prep” fees
- Escrow pad over-collections
- Prepayment penalties on loans you might refi
5) Locking with confidence
Rate locks contain an expiration; 30–45 days is common. Ask about float-down options if the market drops before you close.
About the author
Taylor West compares lender offers and translates the fine print into plain English.