This is the worst question to ask a mortgage lender, period. Not because their rates may not be as good as the other guys, but because they are pretty dang close to the other guys rates usually. Mortgage rates are a moving target and change on a daily basis and sometimes more than once per day. Try calling your stock broker and asking the price of a share of IBM stock today and when he or she answers you, say you will get back to them next week…. Everyone shakes their head and tells me that is nuts so then why do you do it with mortgages? Mortgage loans are traded on Wall Street and that is where the prices are set. When the market fluctuates so do rates. Think about it, rates are at an all time low….again! They got there with small changes over time.
The second issue about rates is that your rate will likely be different from someone else’s rate for many reasons. We start with plain vanilla rates and then we have reasons for deductions or improvements. Reasons like:
credit score loan to value loan type loan size number of units occupancy lock term impounds
I think you get the point.
My main reason for disliking this question is that usually the person who is asking this question should be asking much different questions. I recently met a nice person who wanted to know what my best rate for a conventional loan was and I started asking questions and when I found out that their credit score was 679 and they had very little available for a down payment and in fact what they had available was coming from a gift from a family member, my answer was that I did not have a very good rate quote at all for a conventional loan and they would likely not qualify for a conventional loan any way. In this case, I had an FHA loan with a lower rate and better terms that fit like a glove. This person had been quoted conventional rates by 3 other “professionals” because that is what they asked for and no one else had asked any questions. So not only was the quote not real, it wasn’t available. You know what they say, Garbage In – Garbage Out.
Even someone who has all the right stuff should be asking more than just about the rate. You need to know that the person who is helping you obtain a mortgage knows what they are doing and can help guide you through the process and ask the right questions to get you the best loan at the best rates. There are much different things to think about when purchasing a home or refinancing. If you need a home loan, you need to work with a full time professional with a lot of experience.
I know that last statement may be self serving but it doesn’t even need to be said for other things like choosing a mechanic or doctor or other service provider and a home loan is one of the biggest financial decisions of your life.
Please send me your real estate and mortgage related questions. I am happy to answer you and it may become the topic of a future article.
Hans Bruhner is a branch manager for First Priority Financial. Hans is licensed by the CA DRE # 01085398 and NMLS #243484 and First Priority Financial is licensed by the CA DRE # 00652852 and NMLS #3257. If you have a question, please contact him at (707) 347-9250 or email@example.com