Everyone is an expert.  Interest rates are moving - up? down? sideways?  So much depends on who you ask.  I recently spoke with a client who told me that someone he works with said rates dropped.  He asked how much and was told at least 1 percent.  My client was excited because he had been quoted 6% and was looking forward to hearing from me that his new rate was 5%.  When I told him it wasn't, he was upset. 

"Water Cooler" mortgage rate quotes are given by the uninformed to the unknowing and most importantly without the facts.  Since the unwinding of the mortgage mess, FICO scores (640), purpose (cash out), type of property (2-4 unit), lock period (45 days)  impact the final interest rate/fee package more than ever before.  Many of those attempting to obtain financing were refinancing or purchasing during the "go-go" low-doc, who cares mortgage period.  I showed him a detailed rate quote to support my comments.

I suggested that he obtain a copy of either the Good Faith estimate or the closing statement from the Water Cooler expert so we can compare.  I also asked him to see if he could find out the borrower's credit score, the type of property being financed as well as if it was a cash out refinance, and what the loan to value was if it was a refianance.  The good faith or closing statement would answer those questions if it was a purchase.

While I was surprised when he told me that his research showed that the other guy's profile was similar to his, my review of the good faith estimate showed that the client was being charged points.  I was not and the bottom line was that the rate didn't change but the points and fees dropped and I had already reduced my clients fees by over 1%.

Usually, when the facts are presented, the differences can be explained and clients feel better about the package that they are being offered.  Now the satisfied and educated client is ready for the next "Water Cooler" session.

Have a great day!