HOME MORTGAGE TRENDS FIRST HOME MOVING UP REFINANCING FORMS BUILDING WEALTH CONTACT US


The Great Interest Rate Chase.

The reason you are reading this is because someone referred you to me. All of my business comes from referrals from professionals and satisfied clients. Unlike most loan officers and mortgage companies, I do not advertise. A referral based business is only possible by having satisfied clients who are willing to refer me in the future because of the experience they had when obtaining a loan. My goal is to help you choose the best loan at the lowest overall cost that fits your personal financial goals. Then, I want to make the process of obtaining the loan simple and stress free. I am 100% accountable to the person who has referred you to me, and I am equally accountable to you as my future referring source. Whether you choose to use my services or not, it is crucial that you only work with a loan agent who has been referred.



I made a conscious decision not to show our daily internet rate quotes on my website. I have a number of GREAT reasons why I didn't. They are as follows:

1. Interest rates change on an hourly basis in today's turbulent financial world. For the past two years our mortgage rates have been tied hand in hand with the Stock market. If stocks rise at 8 AM interest rates go up. If stocks plunge at 10 AM due to some unexpected event such as a terrorist threat, interest rates will improve. NOBODY IS AN INTEREST RATE EXPERT TODAY UNLESS THEY CAN PREDICT WHEN RANDOM EVENTS WILL OCCUR. BEWARE OF A LOAN OFFICER WHO CLAIMS TO KNOW THE FUTURE (TOMORROW) OF INTEREST RATES.

2. The interest rate that is right for you depends upon the loan program that fits your long and short term financial goals, and your payment and equity objectives. It is imperative that your loan officer be experienced and armed with the questions that help you determine what loan program is best for your personal situation.

3. Nobody can quote you an accurate interest rate without knowing all of the following criteria:

A. WHEN IS THE LOAN GOING TO CLOSE? Interest rates and points vary by the length of time needed to either process the loan or if you are buying a home, close the escrow.
15 day pricing is the lowest rate
30 day pricing is next best
45 day pricing follows 30 day
60 day pricing is worse
90 day pricing is among the highest

B. What is your credit score? On many loan programs the interest rate and points may vary according to what your credit score is.
A 720+ credit score gets the best rate on most programs. 680-720 is next best
620-680 follows
500-620 there is a wide variation of pricing in this credit score band but rates often will be significantly higher.

C. How much down payment are you able to make?
100%, no down payment loans have the highest interest rates.
81%-100% loans are costlier than loans where the buyer puts a 20% down payment.

D. Are you going to occupy the home? Non-owner occupied loans are substantially more expensive than owner occupied.

E. How big a loan are you applying for? Since it costs a lender as much to service (collect your monthly payments) a $100,000 loan as it does to service a $250,000 loan, loans under $125,000 often cost more than do loans above that. Also, loans over $300,700 are classified as Jumbo loans and carry higher interest rates than loans below $300,700.

F. Are you going to pay your own taxes and insurance? If you don't and instead establish an impound account with the lender, you may save up to ¼ point in loan fee.

G. If you are refinancing, are you taking cash out? If you are and you are borrowing more than 75% of the value of the home, the interest rate/points may be higher than if you were just refinancing to lower the interest rate.

H. Can we document your income? If not, lenders view stated income loans as being riskier and therefore demand a higher interest rate for making the loan.

I hope I've shown you that any interest rate quote you receive over the phone probably is not what you would receive after you formally submit a loan application and the lender completes a personal consultation covering the terms mentioned above. There are too many variables connected with mortgage interest rates for the following sources to be relied upon:

A newspaper quote - the rates quoted in the Sunday newspaper are at least 4 days old because the deadline for most rate charts is the past Wednesday.

A quote on the internet - very few interest rate quotes on the internet are updated daily, let alone hourly which they would have to be to be accurate. Plus most internet lenders don't employ top quality loan officers to consult with you. Many use low-paid clerical staff to mann the phones.

A quote by calling different lenders - again, many national lenders let their newer loan officers and clerical help take interest rate call in questions. The quotes you get will most often not be accurate because the person won't ask you the appropriate questions to supply you with the answer that's correct for your personal situation.

Many people who shop for the lowest interest rate through the newspaper, the internet or random calling of different lenders end up feeling that the lender has used a bait and switch tactic on them because the rate and points at the end are not the same as they were originally quoted. Usually the problem is that the original loan officer didn't ask the right questions or enough questions before quoting an interest rate.

Remember, whether you use my services or not, you should always use a lender to whom you've been referred by a reliable and trustworthy source. That is your best opportunity to be sure you receive everything you expect from the mortgage process, and that you can expect accountability from the loan officer you are dealing with.


webmaster  

Top