This is a great topic. We all get calls asking for our RATES. The problem is that most consumers do not differentiate rates from pricing.
Via
Jay Beckingham (Allied Home Mortgage Capital Corp.):
Why is this the first question that potential customers ask? Actually it's quite simple. In most cases they don't know what else to ask.
This use to be a fairly easy question to answer. I'd really only need some basic information such as primary residence or investment property, FHA or VA, etc. Well that's all changed.
In today's marketplace a wholesale or correspondent lender better be pretty sharp when trying to quote an accurate rate and actually it's nearly impossible with the initial phone call. If you are not a loan officer and/or haven't seen what the pricing sheet looks like than you'd be surprised what a maze it is.
The final pricing is in the add ons, and there can be add ons for nearly every feature of the mortgage transaction.
Let's start with credit score. I'm not aware of any loans with the exception of RD's which don't have credit score adjustments, and if you think it's just for low scores I have a surprise for you. Conventional loans may have price adjustments for scores just below 740 and they are also influenced by the relationship to the downpayment starting at 60%.
The other major ingredient to determine the rate is the loan size. The market just doesn't like loans under $100,000. For many lenders a loan under $50,000 is not doable, for others it just a matter of pricing it up.
There are many different items which can change the rate. We charge for everything.
Don't want to escrow for taxes and insurance, just add .25% to the fees.
Lenders are very creative in deciding what they will charge for in regards to rate and instead of charging the fees directly we need to change the rate to absorb the fees.
So if you want to know what the rate is, until I get a plethora of information, the real answer is;
I'm not sure!
;)
;)
