Mortgage Rate Shoppers Guide
10 Things You Need to Know About Mortgage Rates
By Sonny Allen
Shopping Around? It's not a bad idea! Many mortgage clients feel the need to check rates with several different lenders to make sure that they get the lowest rate available. You may be surprised to know that we encourage our clients to check with the competition if they feel the need to do so. We want clients who feel compelled to tell others about us and we know that requires them to have 100% confidence that they received a competitive rate. Integrity Home Mortgage has affiliations with over 40 top rated mortgage lenders whom we compare rates with on a daily basis to insure that our clients are getting competitive terms. Still, many feel the need to "shop around". But, before you go rate shopping, we want to arm you with the right questions and understanding that will protect you from being misled along the way.
The problem is that most people don't know how to shop for a rate. I can attest that most people who have been burned in the mortgage process are the ones who started out as rate shoppers. So, we make it a goal to help you shop responsibly. The following rules will help you make wise decisions when checking rates.
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Plan your mortgage before you shop!
This is the biggest mistake most people make! The lowest rate on the wrong loan can still cost you money. As the largest debt that most of us will ever have, it is very important to determine the best way to structure your mortgage in order to best achieve your overall financial goals. Work with a Certified Mortgage Planner to make sure the loan you select will best achieve your cash flow, equity, tax savings, payment, and lifestyle objectives.
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Know who you are shopping with!
Be wise, ask questions. Click on the following link to take you to 10 very important questions that you should ask.
10 Questions / 10 Answers. -
Shop all at once!
Mortgage rates change daily and sometimes hourly. You can't compare rates from several different lenders over a period of time. Make sure you work with a lender who can tell you what the mortgage bond market is doing so you will be aware of any changes in rates that may be occurring and be sure that there are no rate changes between receiving your quotes.
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Protect yourself while you shop!
Find out what safeguards are in place before you allow someone to place your personal financial data on their computer. Even though these safeguards are required by federal law, many small time mortgage brokers work anonymously from home and have very little, if any protection to keep your bank account, social security number, and credit card information safe.
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Shop accurately!
The reason we are so often referred strongly is not just because we quote so competitively, but mostly because we quote accurately. There can be as many as 26 items required to give an accurate rate quote. Many times when the quoted rate is lower, it's because the lender giving the quote did not ask enough questions. This is a very technical process and is more than just apple to apples, its red apples to red apples!
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When banks compete? NEWS FLASH: Lending Tree is not a lender!
They are a lead generation company. Mortgage originators pay Lending Tree to buy access to mortgage customers. Hello!!! Don't you get just a little bit nervous doing business with someone who is so short on business that they have to buy referrals? These aren't banks competing! Banks don't have to buy leads. If you want to see banks compete, just call a couple of them. Many folks advertising mortgages are not lenders but rather are generating leads for sale.
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Shop completely!
We get rate shopper calls too! What is so amazing about these calls is how the shopper so often will ask just one question. "What is the rate?" That is like planning your vacation but only asking how much the airfare to get there will cost without regard to hotel, rent car, and other costs. Closing costs and rate go hand in hand so don't ever look at one without the other.
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If it's too good to be true.well you know what that means!
Hey, it doesn't even matter if its in writing so don't be fooled. Lenders are required by the Truth in Lending L aws to disclose rates and closing costs in the form of a "Good Faith Estimate" and "Truth in Lending" TIL disclosures. The problem with these laws is that they only require disclosure, not accuracy! Imagine you show up to closing to find a surprise in your HUD! Mortgage money all comes from the same sources. If someone is quoting you a ridiculous rate you better be ware. A good non-bias source to check rates with is www.freddiemac.com. The internet and newspapers are the worst places to get mortgage rate quotes because they often include teaser rates that operate on the "Bait and Switch" mentality. Only work with someone who you are referred to.
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Shop for value, not cheap!
A mortgage is no different than most things in that you get what you pay for. The best lenders to work with are the ones with an office and a professional staff to guide you through the transaction. They are also the ones who will invest time and energy with you to help educate you so you make good decisions about the financing. Some Bozo working from home without a staff, facility, and most likely without a secure computer system, will almost always be able to quote a lower rate because they have no overhead expense. In addition, professional counseling and knowledge seldom comes from such providers. Do you really want to place the largest financial decision of your life in the hands of the lowest bidder? I know I wouldn't! Value means competitive, not cheap.
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Don't shop with amateurs!
We know your parents love you. We understand that you feel close to your Realtor. Almost everyone has a friend or knows someone who is an expert on the subject of mortgages. But please, if you are getting advice from anyone else, please allow us the opportunity to make sure that they have the right understanding of the situation. Well meaning parents, Realtors, and friends, have caused clients to make some very bad choices. Usually, all it takes is providing them with same education we have provided you. We want them to feel good about helping you and about the choices you make, so we don't mind helping them understand our recommendations.
It is with great confidence that we tell our clients that they should shop rates because we have proven time and again that we are very competitive when legitimately compared to other lenders. OK, so let's suppose you have played by the rules and shopped safely but now we have a problem..someone is quoting you a lower rate than Integrity Home Mortgage. Don't panic, it usually means that there is a problem with the quote but since we are committed to you getting the best deal possible, we will gladly help you get financing with the other lender. all we ask is that we be allowed to verify the quote's accuracy by seeing it in writing and verifying the legitimacy of the lender. It is usually difficult for us to match "low ball" quotes since we offer the best terms we can upfront. Remember the name Integrity means that we put you before our profit and our reputation before revenue!
