October 12 my customer received a notice in the mail from a lender stating he qualified for a 2.875% interest rate with a 2.875% APR which means the loan has no fees or points at all. The mailer was designed so that it looked like it was sent from his mortgage lender but in very small print were the words "blank mortgage is not affiliated with your lender"
I checked the mortgage interest rates for every day in 2019. September 5th was the day with the lowest rates for the year; the 30 year conforming fixed rate loan was 3.49% (APR would be higher) and the 15 year conforming loan was 3.0% (again, the APR would be higher)
My customer asked me to call the mortgage company for him so I did and asked about the rate. I was asked what my (customers) rate is now and I said 4.0% and the answer was "that's close to our rate for a 30 year mortgage". I asked about the mailer advertising the 2.875% rate and the reply was .....drum roll......"that's just advertising to let you know the rates have gone down."
This lender sent a mailer designed to look like it came from the customers lender and they quoted a rate and APR that have not ever been that low. I checked all the way back to 1975 and could not get data beyond that. October 2, 1981 the 30 year rate was 18.20%
So many times customers complain to me when I quote them a rate saying they see rates much lower. The reason they are seeing rates lower is basically because of fraudulent advertising. Mortgage rates are determined by loan size, equity position, owner or non-owner, credit score, number of properties financed, property type (condo - single family),
and even the loan type; FHA, Fannie Mae, or VA and other factors.
One comment on APR - that would take an entire brochure to explain property but in a nut shell it is to try to compare apples to apples. A loan that has a 3.75 rate with no loan fees at all has a 3.75% APR...the same loan with a 3.5 rate and 1 loan point has a 3.77 APR (based on 30 year 200,000 loan)
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