So many people are fooled into using a mortgage lender/broker by the bait and switch game and when they are too far in it's too late to switch to another lender.

First off mortgage shoppers, WHO INVESTED THE QUESTION "WHAT IS YOUR RATE?" that is the worse question anyone can ask because it lacks the facts to support that quoted rate! So mortgage shoppers remove that question from your arsenal.

Example One:

$210K Sales Price with a $10K down payment

Joe and Mary buyer are looking for a $200K mortgage to buy a home they just signed contract to buy, they pull out the phone book and they are off, they start to call the 200 listed mortgage companies and ask that pointless question " What's your rate?", after spending all day calling and writing down the rate of all 200 lenders they see rates from 4.875% to 5.875% on a 30 year fixed mortgage, they talk that evening and say wow let's go with the 4.875% as they were by far the lowest rate! Well that's great until they get signed up , start the paper work, pay for an appraisal and get to the day before the closing, the settlement agent calls and tells them the closing is set for 2pm tomorrow and they need to bring a check for $16K, hold on...wait the buyers say, we are borrowing $200K on a $210K purchase price, we already gave $5000 with the contract so we are suppose to bring the additional $5000 , we were prepared to pay an add'l $5000 for the closing costs, tax and ins escrows so where do you get $21K from when we were expecting to bring a maximum of $10K? The settlement agent looks at the pre-hud and there it is Lenders ORIGINATION FEE 3% or LENDERS DISCOUNT FEE 3% which is equal to $6000.00, Joe and Mark say: "what the heck is that?" The settlement agent tells them" this is a fee the lender charges in exchange for a lowe interest rate, The lender gave you a great rate but they charged you $6000 for that rate"

So the point here is the RATE IS NOT the question you should be asking a lender when you call for a mortgage!

Example Two:

100% Financing Program For  Buyers

Dick and Jane are looking to buy a home with 100% financing, they open the phone book and call all 200 lenders listed one day, they tell the Loan Officer they are looking for 100% financing and then ask that pointless question " What is your rate? " The loan officer says we have a great program that offers 5.25% for a 30 year fixed mortgage, the loan officer then tells them that program comes at a cost of 1 point and theirlenders fees with appraisal is $1200.00,  Dick and Jane talk about it and decide that this loan officer was pretty straight forward with them and the costs are reasonable, after all the other 199 lenders they called had rates of 5.625%-6.125% so they proceed with the lender offering 5.25%. After the LO runs the application and credit the LO finds out the debt to income ratio does not qualify DIck and Jane for the program quoted.

There is good news for the Loan Officer, Dick and Jane do qualify for another 100% program but the bad news is the rate is 6.125% so the loan officer thinks to them-self " I know Dick and Jane shopped other lenders (or maybe not) and I don't want them to call another lender where I will lose my commission so I will not tell them anything about them not qualifying for the 5.25% rate and we will just proceed"

Now the evening before the closing the Loan Officer makes the call ,(it's 6pm Thursday evening) " Hello Dick and Jane this is your trust worthy loan office, I have some bad news, I just got a call from the underwriter whowas finishing up your loan for closing tomorrow and I hate to tell you this but we got a denial on your loan, boy am I sorry to have to tell you this when we are scheduled to close tomorrowat 11am (less than a day away), the underwriter can not get an exception on the high debt to income ratio for this 5.25% program.

I do have some good news though, we scrambled to see if we can figure out another way to get this done and still close tomorrow and we are able to get a full approval for another 100% program and we can still close tomorrow morning on time, this way you can still move in your new home"

Dick and Jane are relieved after-all they have the movers coming at 8am, they took the day off from work, they have brand new furniture being delivered late Friday etc..

Then the trust worthy loan officer says "the only problem is the program that we are able to qualify you for is 6.125% not 5.25%, considering your debt to income issues this is the only way we can get this done!"  So now what do they do?.

What buyer is going to walk away from the deal now? they have their hearts set on the new place, they invested tons of money into this and they are having friends and family over Saturday to see their new home and help them move in. The buyers have to do the deal....

The sad thing is Dick and Jane have no idea the Loan Officer knew this all along that the loan would not be approved at the 5.25% program.

BUT............Who's fault is it?

Was this done only because The Loan Officer only cared about his or her best interest and not the clients best interest or is this a strategy on the part of the Loan Officer because buyers are so unfaithful and want to be told something they want to here rather than be told the truth? Buyers will call and call and call until they get someone to tell them what they want to hear and will dump the honest mortgage loan officer because someone tells them what they want to hear LOW RATE!

So the point here is the RATE IS NOT the question you should be asking a lender when you call for a mortgage!

You should be asking all the lenders all the same questions and go deep into the question asking, compare apples to apples, a good lender will offer to give you the pros and cons for each program not just throw a rate at you that more than likely is not the best for your situation

For Honest mortgage advice and free mortgage pre-approvals contact

Leo Namiot

Benchmark Mortgage - Connecticut Mortgage Lender

http://www.benchmarkct.com/