OCEAN PACIFIC MORTGAGE

Before You Begin | Choose the Right Loan for You
Picking Rates, Points and APR |Getting Pre-Approved
| Closing Your Loan | From Contract to Closing

Step 3: Picking Rates, Points and APR

At first, making sense of interest rates, points and annual percentage rates (APR)
can be daunting. But it doesn't need to be. Like choosing the right
loan type, it's all about choosing the down payment and monthly payment that
fits your needs and lifestyle.

See How Your Interest Rate Affects Your Payment
The interest rate on a loan is used to calculate your monthly payment.>br> The higher the interest rate, the higher your monthly payment. The lower the
interest rate, the lower your monthly payment.

Lower Your Rate and Payment with Points
Also know as a loan's "origination fee," points are fees paid to the
lender at closing. Each point is equal to one percent of the loan
amount. For a $100,000 loan, a point equals $1,000. Two points would be $2,000.

So if you have the cash to put toward a down payment, it's
a good way to save money on interest over the life of your
loan. See how points affect rates. If you're low on upfront cash,
then go for fewer points. All the points you pay on a purchase
mortgage are deductible in the year you pay for them.

Use the APR to Compare Loans
The APR expresses the annual cost of a loan as a percentage, factoring
in its rate, as well as the points and other charges over
the life of the loan.

The Truth-in-Lending Act requires that all advertisements for home loan credit
terms include the APR. The APR is intended to enable you to compare terms
of loan products from different lenders. To make an accurate comparison, compare loans
with the same terms, interest rates and points. Then look at the APR.
The loan with the lower APR is the less expensive loan.

Lenders also provide the APR along with a loan's interest rate in the
Truth in Lending Disclosure Statement. This document will be mailed within three
days of your application submission.