Introductory Rates and Lenders Ratios: The Basics
Credit cards, lease agreements, and vehicle loans provide introductory rates. The discount serves several purposes. On the surface, it saves the customer money during the introductory period. If you dig deeper, it’s a marketing tool.
Lenders know that a home purchase requires a significant capital investment. In addition, a new homeowner requires funds to furnish it, procure insurance, and pay the moving expenses. To gain your business, lenders sacrifice interest charges for a designated period. The lower repayments help the homeowners re-establish their finances.
Mortgage House makes the loan terms transparent for applicants. Our loan specialists provide all the necessary details in the welcome packet. Those who accept an introductory rate should find out what happens when it expires.
Some lenders make up the difference after the discount period expires. The higher repayment is a shock for some homeowners.
When you’re in the market to purchase a home and require financing, consider shopping around for the best loan terms. In some cases, the overall cost of a mortgage without an introductory rate is the same as one without it. It’s possible to pay less without a discount period because the overall rate is lower.
Mortgage House remains a forward-thinking non-bank lender. We also use proprietary tools that help our loan specialists find the best home loan rates and terms for most applicants.
Introductory Rates and Home Loans Conclusion
Introductory rates are common for financial products. Mortgage House offers them to new clients. To understand what happens after the rate expires, speak with our loan specialists.