Comparing Companies
Here’s The Right Way to Shop Around
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!
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 often 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.
What Is The Next Economic Report Or Event That Could Cause Interest Rate Movement?
A professional lender will have this at their fingertips. There are plenty of websites that have a calendar of weekly economic reports and events which may cause rates to fluctuate. If your lender doesn’t pay attention, they shouldn’t earn your business. DO NOT work with a lender who is simply rolling the dice about interest rate trends and movements.
What Is The Impact On Mortgage Interest Rates When The FED “Change Rates”?
The answer may surprise you. When the Fed makes a move, they are changing a rate called the “Fed Funds Rate”. This is a very short-term rate that impacts credit cards, credit lines, auto loans, and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets. For more information and explanation, just give us a call.
What Is Happening In The Market Today And What Do You See In The Near Future?
If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week’s news, and probably not a professional with whom to entrust your home mortgage financing.
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!
Once you are satisfied that you are working with a top-quality professional Mortgage Advisor, here are the rules and secrets you must know to “shop” effectively.
Here’s The Inside Scoop On How To Do It Right!
If It Seems Too Good To Be True, It Probably Is
You likely don’t need us to tell you that, did you? Mortgage rates and funds all stem from the same sources, so if an offer sounds too incredible, it’s wise to ask questions and discover the catch. If the interest rate seems incredible, are there any additional costs or fees? How long is the rate lock period? If the fees are discounted, does it come at the expense of a higher interest rate?
You Get What You Pay For
Choosing the cheapest deal might seem like a good idea, but in reality, you’re entrusting one of the most significant processes of your life to someone who may not have the necessary expertise or experience to provide you with proper advice and personal service. If you go for the lowest bidder, be prepared for the worst-case scenario of not being able to close at all. While it’s tempting to look for the cheapest quote on the internet, bear in mind that horror stories about missed closing dates and unexpected changes are often the result of working with discount or internet lenders who lack experience. Remember, the cheapest rate on the wrong strategy may cost you thousands in the long run. At The Heideman Group, we provide competitive rates and costs, investing in systems and teams to ensure you receive the top-quality experience you deserve.
Make Correct Comparisons
When comparing mortgage estimates, don’t just focus on the total cost. It’s crucial to compare lender fees with lender fees, as these are the only ones that lenders can control. Also, make sure that lender fees are not buried among the title or state fees. Although lenders are responsible for quoting all fees related to a mortgage loan, third-party fees are often under-quoted initially to make the total cost seem lower. This is because many consumers are not aware that they should not just look at the bottom line. Therefore, it’s important to carefully examine each fee and compare them between lenders to make an informed decision.
Interest Rates And Closing Costs Go Hand In Hand
It’s possible to have any interest rate you want, but a lower rate may come with higher costs. Conversely, paying discounted or no fees could mean a higher interest rate. Finding the right balance depends on your financial goals. A Mortgage Advisor can provide the best advice and options for balancing interest rates and closing costs that align with your objectives.
Interest Rates Can Change Daily, Even Hourly
When comparing lender rates and fees, keep in mind that they are constantly changing. To accurately compare two lenders, you must obtain a quote from each at the same time on the same day with identical terms. Additionally, you need to know the length of the rate lock you’re seeking, as longer rate locks typically come with slightly higher rates.
Our Advice To You.. Be Smart. Ask Questions. Get Answers.
As you can imagine, we wouldn’t be encouraging you to shop around if we weren’t 100% confident that we will give you a great value and serve you the very best.