The Interest Rate is the name of the game when it comes to shopping for a home loan. But it is not as simple as dailing a mortgage company and getting a quote. There are hundreds of programs and many options to these programs that will affect your decision.

Be sure to learn about and ask for the APR of your quoted rate, which will figure into account many of the fees charged by mortgage lenders. We have provided some information on APR and the different options available to you when selecting an interest rate and a loan program.

APR -- The Annual Percentage Rate figures all of the costs to finance, including interest and fees, and gives you an effective interest rate. APR is helpful for comparing programs with different rates and fees.
ARMs -- 1/1, 3/1, 5/1, 3/3, index, margin, yearly and lifetime caps. Learn the lingo before asking for an ARM quote.
Buydowns -- Lender Funded and Borrower Discount Points can buydown the interest rate for the first couple years. Great to ask about if you for see more income in a few years or to help with the increased housing payment.
COFI -- Based on the Cost of Funds Index, this more stable arm product is seeing increased popularity. Find out more and examine this ARM product carefully.
GPM -- Graduated Payment Mortgages, with lower payments in the beginning, help with lower initial payments, but are not as popular.
LIBOR -- Libor ARM's are based on the London Inter Bank Offered Rate eliminate the interest rate risk for mortgage companies. These loans are often use for higher risk borrowers.

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