What’s my best mortgage interest rate? Let me ask my mechanic.

Mortgage and Lending with TBA


After being in the mortgage industry for nearly 10 years, this is the question I have received the most often:


“What’s your best interest rate?” 



Farmers Market

Certainly, I understand consumers wanting to find the best deal.  Of course you want the lowest cost and lowest payment available.   Whether it be for a mortgage loan to refinance or purchase real estate, or if you are at the local farmers market looking for the best price for vegetables, you want to get the most for your hard earned dollar…I'm with you there.                                                



What we need to understand, though, is that a mortgage loan can be in the amounts of a few hundred thousand dollars, to over a million.  Especially in Hawaii.  So there will be plenty of factors that determine the eligibility to borrow that much.  We’re not talking carrots here.


I always ask the inquiring consumer to fill out an application to see what interest rate they can qualify for.  They sometimes look at the 5 page application and say, “Just let me know your best rate before I fill this out.”   As easy as it is for me to look up the lowest rate of the day, it’s really not that black and white, and I could be giving false hope.   Here is an example why…


You are driving to work one day and you notice a funny sound coming from under the hood of your car.  You bring it to an auto shop and ask them for a quote to fix it.  What is the first thing they do? 





 Engine Photo



 They need to identify what is causing the noise, the size of the engine, age of the car, what parts are needed, where to order it from, how long it will take to fix, labor costs, etc.  The overall costs will depend on the work needed…it could vary from a minimal patch, to a worst case scenario of having to rebuild and being very costly.





But they need to look under the hood to see what is going on before they can accurately quote you.  And I guarantee the next person in line with noise in their engine will be given a different quote depending on the specifics of their situation.


When we ask a consumer to fill out a mortgage application, that is how WE look under the hood to see what is going on.   The application can answer many questions:  What type of property, are you occupying it or renting it out, how much equity/is there equity, what is your income, are you a business owner, how much monthly debt do you have, what are your 3 credit scores, how is your credit history, how much do you have in reserves, where is the down payment coming from, is your building on the bank's approved list, etc. etc. etc.   The questions on the application not only help determine what interest rate you qualify for, but also helps the Mortgage Broker/Loan Officer to determine the best loan program to fit your specific need, and which bank has that program.


And like at the auto shop, the person before of you and the person after you will likely have a different quote depending on their situation.


Bottom line:  If you are asking the bank to LOAN you hundreds of thousands of dollars or more, to be paid back monthly over 30 years, it's very important to determine your eligibility to do so.  An Underwriter will need as much information as possible to approve the loan/interest rate.  Can I look through my rate sheets for the lowest number and share it with you, without asking you any questions or knowing your situation?  Sure.  Is that what you will actually qualify for AFTER reviewing your full application?  Maybe, maybe not.  It’s possible...but like your car, we need to look under the hood first. J


Aloha and have a great week!

Pete Castillejos

NMLS #331643


                                                                      Visit http://www.HawaiisMortgageGuy.com

                                                               or email pete@808HomeMortgage.com to prequalify



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Banks we partner with include:  Central Pacific Bank, Honolulu HomeLoans, American Savings Bank, Bank of Hawaii, Pinnacle Capital Mortgage,  Finance Factors,  Stearns Home Loans, Plaza Home Mortgage, and more. Contact me for current Hawaii Mortgage Interest Rates.

Member:  Hawaii Association of Mortgage Professionals,  National Association of Mortgage Professionals, Kailua Chamber of Commerce, Honolulu Business Network

Serving All Islands: Hawaii (Big Island) Real Estate Mortgages, Oahu Real Estate Mortgages, Maui Real Estate Mortgages, Kauai Real Estate Mortgages, Lanai Real Estate Mortgages, Molokai Real Estate Mortgages.

Mortgage Loan Refinance, Hawaii Real Estate Loan

Comments (2)

Yvonne Jaramillo Ahearn, Esq. (B)
Hawaii Life Real Estate Brokers - Kailua, HI

Great article Pete! Suggested for a featured post. Aloha, Yvonne

May 20, 2013 01:55 PM
Pete C
TBA - Kailua, HI
Hawaii Mortgage Loan and Refinance

Thanks Yvonne!  I've been out of touch with AR, I didn't know we could suggest that.  Mahalo!

May 20, 2013 02:14 PM