Beware Rates That Seem Too Good to Be True!
Oh, if only they had asked a licensed loan officer ahead of time!
This is what the buyers were "promised" as their rate.
Needless to say, this "rate" didn't really exist. Just like those emails you get that say you've won the Nigerian lottery, or that a heretofore unknown relative has passed away and left you several million dollars in a bank in the Phillipines (if you'll only send along your social security number and bank accounts), this one just probably doesn't exist.
So, how do you protect yourself? Well, rates have been at lows that haven't been seen in several decades, and they have bumped along at numbers that start with 3 and 4....and even 2 in some cases. But be sure to check what the rates truly are. This can be accomplished by a quick Google search. Know that the interest rates change daily, and that there are several products out there to choose from, including 15 year and 30 fixed rates, and 5 year and 1 year ARMs (which stand for Adjustable Rate Mortgages.) Keep in mind that the very best rates often require spotless credit scores, too.
Check with a licensed, local loan officer. Products can vary by locale (FHA loan limits, for example), and your best bet is to have a lender who is very familiar with the local market. This will also help insure that your appraiser is familiar with the local area!
So, what happened to those buyers? Well, their "real" rate ended up being around 4.5%, which put them in a different house-hunting dollar amount. But not until after the loan conditions deadline passed, costing them several thousand dollars in Earnest Money, as well as their dream house.
Always remember that if the Rate seems Too Good To Be True, it probably is! Don't find out the hard way....
Know that I am NOT a loan officer, nor do I play one on TV. ALWAYS get expert advice from an actual lender when you are considering a home purchase!