Shopping For A Mortgage - The Inside Scoop On How To Do It Right (Part I)

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Mortgage and Lending

Shopping For A Mortgage - Here's The Inside Scoop On How To Do It Right!

 

First:  make sure you are working with an experienced, professional loan officer.  The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way.  But how can you tell? 

 

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY.  IF THEY DO NOT KNOW THE ANSWERS...RUN...DON'T WALK... RUN...TO A LENDER THAT DOES!

 

 

1) What are mortgage interest rates based on?  (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions.  DO NOT work with a lender who has their eyes on the wrong indicators.)

  

2) What is the next Economic Report or event that could cause interest rate movement?  (A professional lender will have this at their fingertips.  For a list of upcoming reports, please email your request to me at kpeidl@linc-mort.com)

  

3) When Bernanke and the Fed "change rates", what does this mean... and what impact does this have on mortgage interest rates?  (The answer may surprise you.  When the Fed makes a move, they can change a rate called the "Fed Funds Rate" or "Discount Rate".  These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like.  On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change.  This is due to the dynamics within the financial markets in response to inflation.   For more information and explanation, just give us a call).

  

4) Do you have access to live, real time, mortgage bond quotes?  (If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday's newspaper, and probably not a professional with whom to entrust your home mortgage financing.  Would you work with a stockbroker who is only able to grab yesterday's paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future?  No way!)

  

  

Be smart...  Ask questions...  Get answers!

  

More than likely, this is one of the largest and most important financial transactions you will ever make.  You might do this only four or five times in your entire life... but we do this every single day.  It's your home and your future.  It's our profession and our passion.  We're ready to work for your best interest.

Click here for Part II

Karl Peidl                  

 Senior Loan Officer

Lincoln Mortgage Company

 251 Bellevue Avenue, Suite 102

Hammonton, NJ 08037

  

1-609-878-7013

1-609-878-7008 (fax)

1-609-254-6687 (cell)

kpeidl@linc-mort.com

Referrals are the best thank you!!!

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Teral McDowell 07/30/2009 11:57 AM
Topic:
Mortgage / Finance
Location:
New Jersey Atlantic County Hammonton
Groups:
South Jersey
New Jersey & Pennsylvania -- Realtors/Loan Officers/Title Clerks/Real Estate Lawyers
1st Time Buyers
Dedicated Bloggers
Addicted to Active Rain
Tags:
interest rates
mortgage rates
shopping for a mortgage
mortgage shopping
rate shopping
mortgage backed securities
lenders

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Rainmaker
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Teral McDowell
Referral Patners LLC - Murphy, TX

Hi Karl, I like this commentary so much I am going to re-blog as this information can be applied in any state. Great post, thanks.

Jul 30, 2009 12:00 PM #1
Rainer
108,048
Karl Peidl
Moorestown, NJ
Accredited Loan Consultant

Thanks Teral.  I think most customers think simply calling a mortgage company and asking "What's your rate?" is the best way to shop.  Unfortunately, this leads most folks to end up going with the best liar.

Jul 31, 2009 02:42 AM #2
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Rainer
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Karl Peidl

Accredited Loan Consultant
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