One of the most important aspects of obtaining a home loan or mortgage is getting the lowest possible interest rate. Society has driven it into our heads that this in itself is paramount to anything else, including the actual house you are buying. In fact, whenever I’m doing a loan for someone, literally the first thing they always ask me is “what are rates looking like today?” People want to know how much they’re going to pay, and how this will affect their livelihood.
So if you’re in the market for a new home and you are concerned about this, there are a few things you should know before you get too preoccupied with your interest rate.
IMPORTANT INFO ABOUT RATES
First of all, mortgage rates change, and they change VERY OFTEN. How often? Well, last month lenders were re-pricing (changing rates) at an average of every 4 hours. That’s right. EVERY 4 HOURS. Remember too that this is just an average, and many times rates have been known to change every 30 minutes or so. So when your loan officer seems reluctant to speak with you about interest rates, it isn’t because he is trying to mess you over. More than likely he is just scared to quote you something just to see it change an hour later. After all, getting a "great mortgage rate" could end up saving you 1/8 % on your rate and consequently a couple hundred dollars in fees.
So what do most people do to “get the lowest rate?” Society will tell you that the best way to achieve this is to “shop around” and get offers from multiple loan officers. While in theory this is an excellent idea and supposed to make the process easier, the truth of the matter is that it doesn’t work perfectly. At least not the way you want it to.
Why not? Well, as I mentioned before, while you're trying to figure out which loan is cheapest, or most appropriate, or has the lowest costs, mortgage rates are moving, and they are moving ALWAYS. Furthermore, being that getting offers from different loan officers can take a week, rates can be totally different even a day later than when you started. So, timing is everything with this.
RECOMMENDATIONS
So what do we recommend? How do you get this lowest rate and still not feel like you’re getting the run around? Well, the best thing you can do is get your shopping done early in the process, because the truth is, most loan officers have access to the same rates. The better info you give them, whether it be about yourself, the home you desire, or how much you want to pay each month, the better than can serve you.
By doing this you will get a good feel of which individual you want to work with, and you will learn a lot in the process of potential rates and closing costs. Some loan officers won’t return your calls, some will give you inflated estimates, and some will even tell you they can’t help you out. These are the folks you need to weed out.
In the end you should be able to decide who you want to work with, and who can serve you the best.
The one you chose should be able to keep you informed about financial trends, and by planning accordingly, they can time your rate lock to when you desire to close, in turn getting you the best rate possible!
DON'T BE AFRAID TO GET YOUR CREDIT PULLED
Oh and one last thing, one of the biggest deciding factors for loan officers when shopping your rate is your credit score. The higher your score, the better chance you have of getting a lower rate, and vice versa. So be honest with the person you are working with, and don’t resist if they want to pull your credit.
Luckily, a formal credit pull by a loan officer working for a mortgage company is treated completely different than if you are applying to get 15% off your first purchase at The Gap. Also, unlike applying for store credit cards, applying for multiple mortgage quotes won't count as multiple, consumer-initiated inquiries, which is a good thing.
So, if you’re interested in getting a mortgage quote, don’t hesitate to CONTACT US and we will get back to you as soon as possible. It always helps to work with someone who is knowledgeable, and at the same time honest.
- Pate
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