Is there such a thing as too much shopping for a mortgage loan? I believe so!

“What is your rate?” <= I get that question a lot. Hehe… I usually answer it like this. “Same as everyone else”.

Well, it is true….. We sell our loans to the same people as my competitor does. We all have Fannie Mae delivery fees(called rate adjustments) for a multitude of risk variables. And whether you ask me or my competitor, we just don’t have a 30yr Fixed interest rate.

Well, at least we don’t have a published 30yr rate. It varies based on whether the borrower is willing to pay delivery fees upfront or roll those fees into the rate. By the way: Paying those fees up front is usually the best course of action for most people…. As we really have to adjust your rate quite a bit to cover those delivery fees.

Another myth: Someone with a 710 credit score earns a lower rate than someone with a 680 credit score.. Well, not always. A 680 credit score with 60% LTV(loan to value) pays less in delivery fees for the same rate as someone with a 710 at 80% LTV.

Confused?

Sometimes, I am too.

So what happens if the borrower gets answers to their question; What is your rate? They end up applying with the biggest liar. Because if the lender is throwing out a rate over the phone without a long conversation about the particulars of the deal…. They are only lying. They don’t have a 30yr fixed rate. They have a 30yr fixed rate with 720 FICO score and 80% loan to value. They have a 30yr fixed rate with a 680FICO and 90% loan to value. But they DON’T have a “30yr Fixed Rate”.

And what if the loan officers ask all of the right questions? They have the FICO score and LTV. They quote 5% with 1 Point. What about the other fees? <= Rates have a direct correlation with fees. A loan with higher fees will usually have a better rate than a ‘Low Fee Mortgage’

I guess the moral to the story should be: “Shop for a trusted advisor” when looking for a mortgage. Ask friends/relatives/co-worker for a referral to who they used. And your realtor will know some good loan officers too!!

Tom Burris
DallasLoanGuy.com
Dallas, TX

"Your Dallas Mortgage Consultant"

http://www.dallasloanguy.com/


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I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!! Subscribe to My Blog and stay informed about current lending changes!!

While I personally focus on Texas Home Loans and First Time Home Buyers.... I do lend in other areas.