At least two dozen times a week we had people call me and ask,"What's your rate on a 30 year fixed rate?" Most times when I try and get additional information from the potential borrower. Unfortunately, for both the caller, and me they don't want to tell me anything. "I already know what I want, just give me a rate," is the usual response.
Now, I'm not encouraging you not to shop around for the best rate.
But, asking for a rate without giving more information is a bad idea. Why? Because frankly, anybody can give you any rates quote they want over the phone, there is no way you can hold them to that rate. You see, there are two kinds of mortgage companies out there, those that are only interested in you as a loan customer and those that look at you as a client for life.
Those companies that want a fast buck no they can quote you anything they want just get you in the door, then they can use whatever excuse to "convert" you to a different loan with a different rate.
Those companies that want you as a client for life, will take the time to ask for is a much information as possible, upfront, so they can not only give you the best rate possible, but they can also quote you the best loan program for your situation.
Additionally, far too many people think they already know what loan program is best for them.
You may think you're ready and know what you want, but unless you know all of the options in the marketplace you may miss an opportunity for a better loan program or situation that you didn't know existed.
Let me ask you, have you ever gone into a store to buy a specific product, but came out with something entirely different? If you did it was probably because you didn't know the new product even existed or a knowledgeable person in the store gave you new information that helped you make a better informed decision.
The job of a competent loan officer is to use their years of expertise to help you select the best option for your situation.
Please, don't assume you know what's best for you.
Now, I'm not saying that you shouldn't make the final decision. After all, it is your money, your home and your financial future. However, there is no harm at all and letting a competent, well trained mortgage professional give you several options, then you select which you believe is best for you.
2a. Finding the lowest mortgage interest rate is not always the best deal.
(This is so closely related to number two don't count it as a separate issue.)
Some loans have very attractive interest rates (also known as teaser rates) but you may be hit with higher up front charges. Points and or origination fees are the most common ways to lower the rates and charge upfront cost. When searching for a mortgage, ask the lender if they are charging points or origination fees. Points and origination fees are calculated as a percentage of the loan amount. See example below.
1 Point = 1% of the loan amount $2,200 paid at closing
2 Points = 2% of the loan amount $4,400 paid at closing
Beware of most adjustable rate mortgages (ARM'S) and Balloon Mortgages.
Arm rates adjust differently depending on the loan program. The ARM rates may adjust as often as every six months but in most cases they adjust after 1,2,3, and 5 years. With interest rates at the historic lows, interest rates on ARMS are far more likely to go up when they adjust. The Balloon Mortgage requires the borrower to pay the loan off when it matures.
There are many lending tactics to sell the borrower on a low rate and then charge outrageous fees and costs. Don't fall into the "bait and switch" lending ploy.
That being said, there are several excellent adjustable rate loans that are perfect for the right situation. Keep in mind, I don't try to force everyone into the same mold or in this case the same loan program. With over 1,000 loan programs available, I can almost always custom tailor a loan to fit most clients' wants and needs.
Visit http://www.pmfmtg.com/ for a copy of a Free Report: Six Insider Secrets Mortgage Lenders don't want you to know. There is a vualt of information I have available for consumers by vistiing my website.
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Email Louis Vela at LVELA@PMFMTG.COM or call Louis at (708) 243 - 1915