Lowest Mortgage Rates Tough to Find? Frustrated? Confused? Here’s Some Help!
Lowest Mortgage Rates - seems like everyone is advertising low interest rates nowadays - but how do you make sure you are really getting the lowest mortgage rates for your home loan
Many people will tell you to shop at many mortgage lenders for a home loan.
STOP!!! WAIT!!!
That’s true, but if not performed correctly this strategy can backfire, resulting in loan processing surprises, undue effort, increased closing costs – and worse – a higher interest rate than you need to pay.
When shopping for a mortgage lender you should first focus on characteristics such as the lending process, mortgage closing costs & fees, and professionalism.
Don’t start out by asking every mortgage lender about their interest rate. Finding the right lender will get you the lowest mortgage rate on your new loan and will save you tons of effort and frustration.
Here are four mortgage lender inside secrets to help you locate a mortgage company who can provide the lowest mortgage rates on mortgage refinance, debt consolidation, or purchase money mortgage loans.
Mortgage Lender Secret #1
Many unethical lenders love to be asked “what is the lowest mortgage rate I can get”.
This is a blatant invitation to be quoted an interest rate the lender can’t possibly provide – a classic bait and switch tactic – you’ll usually hear an interest rate that sounds too good to be true. Unfortunately it usually is!
You have to understand that ethical mortgage lenders can’t possibly quote a firm interest rate for your home loan until they have reviewed your credit history, your debt-to-income (DTI) ratio, and the loan-to-value (LTV) ratio.
Instead of inquiring about the lowest mortgage rate you should tell the lender you are looking for a mortgage loan and can they help you with the process.
If you do ask the “mortgage interest rate” question up front, the lenders response you want to hear will sound something like this:
“that’s a great question, what are you trying to accomplish”?
or…
“we have a range of mortgage rates and loan plans available, can I ask a few questions before I quote you an interest rate….?”
These types of questions are necessary to ensure that you can get the lowest mortgage rate possible.
Some borrowers are reluctant – even to the point of refusing the disclosure of any information – before the lender will quote a mortgage loan interest rate. If you belong to this group I would suggest that you are not ready to shop for a mortgage loan.
A lender has to have some information in order to serve your needs professionally; to do otherwise is a disservice to you.
If you don’t hear these types of questions from the loan officer (including clerks at large banks), find one that will. Your financial future may depend on it.
Mortgage Lender Secret #2
The term “no-cost mortgage loan” sounds so irresistible to most people that they lose sight of what they are trying to accomplish with their new loan.
The terms “no-cost loan” and “lowest mortgage rates” just cannot exist in the same mortgage loan. The reason is simple – people just don’t like to work without being paid (I’m sure you belong to this group too!).
Creating any type of mortgage loan is a painstaking task that involves a lot of very specialized work. In America we’ve become accustomed to instant delivery of everything, mortgage loans are just a little different and require a little research before a loan is approved.
One just cannot expect all this work to get done for nothing – these people must be paid.
So in a no-cost loan how do these people get paid to deliver the home loan that you want?
There is only one way and that is to increase the mortgage interest rate that you eventually pay.
But here is the real trap for you, folding all those closing costs into the mortgage interest rate means that you don’t have a clear picture of what your new loan is really costing you.
A no-cost loan creates a situation where you can easily end up paying higher closing costs over the life of the loan, whether that’s an adjustable rate mortgage or a 10, 15 or 30 year fixed interest rate loan.
Be careful with no-cost loans, the costs are in there somewhere and it’s very difficult to compare no-cost loans across lenders.
You will be much further ahead if you get a closing cost estimate for your new home loan that is separate from the mortgage interest rate.
Mortgage Lender Secret #3
Sooner or later the issue of points being paid for a mortgage loan is bound to be discussed. Most lenders automatically charge one point as a loan origination fee and is used to defray some of the lenders cost of creating the loan for you.
One “point” is a payment at closing of 1% of the loan amount. So on a $100,000 loan, one point would be $1000.
Depending on your goals you may want to pay additional points beyond the origination fee to make certain you are getting the lowest mortgage rates on loans under consideration.
The secret is that you will obtain the biggest mortgage interest rate buydown on the first point that you pay after the loan origination point.
For example, if you pay two points for your loan the second point after the origination fee is used to reduce the interest rate.
The third point you pay will certainly reduce the mortgage interest rate further but the decrease will be less than the second point and so on.
When I obtain a loan for myself I usually pay one buy down point but not more (yes, loan officers and lenders have to pay mortgage loan closing costs too!).
Depending on your goals you may want to consider paying more than one buydown point to ensure you are getting the lowest mortgage rate possible.
If your mortgage lender is not willing to discuss the incremental benefits of each buydown point on your mortgage interest rate then you should find another lender.
Lender Secret #4
Mortgage loan prepayment penalties are like extra gravy when creating a mortgage loan. A mortgage loan prepayment penalty must be paid if you pay off the mortgage loan early.
Mortgage prepayment penalties do not usually apply to extra payments made to the loan principle – they come into play when the real estate is sold and the loan is paid off completely.
Unfortunately, many borrowers can be talked into a mortgage loan prepayment penalty because the loan may be at a lower mortgage rate.
However, on most cases the size of these payments are so high compared to the impact on lowering the mortgage interest rate that they are almost never worth the risk
The policy in my office is that we will never create a mortgage loan with a prepayment penalty – even if the borrower requests one to get a lower mortgage rate.
Other characteristics of top-notch mortgage lenders include….
Loan paperwork processing
We use a streamlined loan process that ensures we can lock your loan at the lowest mortgage rate as soon as possible.
For mortgage refinance or debt consolidation loans you don’t even need to leave your home to put your new loan in place. You can sign loan disclosures electronically, we do all the loan processing work in our offices and we’ll even send out a title company/loan rep to your home to sign the final loan documents!
You don’t even have to leave your home! How easy is that?
Professionalism
We create mortgage loans at the lowest mortgage rates nationwide, and to me you are more than just a borrower on the other end of the phone.
If you want to try some mortgage rates on for size you can use the mortgage calculator here.
If for some reason I can’t help you with a mortgage loan, the least I will do is provide some coaching on how to improve your credit score.
Keeping your score as high as possible will save thousands by helping you qualify for the lowest mortgage rates possible as well as qualify for the lowest interest rates for any other loans such as home equity loans, car loans, and any other loans you may obtain in the future.
You’ll save thousands in loan interest by keeping your credit score high.
You’ll talk to me – the author and owner of this web-site – and perhaps my assistant to schedule your loan closing.
I do not employ legions of clerks whose sole task is to type your personal information into a giant corporate database where it can be resold and used to send you endless junk-mail and create endless telemarketing phone calls from other companies.
Your personal information is treated confidentially and if we decide not to do business together the paper shredder is within arms reach of my desk. You can be sure your information will be closely guarded.
My personal goal is to put you in a better financial situation after we talk than you where before you called. If you would like to explore a mortgage refinance loan, debt consolidation loan or a home purchase loan, please contact me via the forms found on this page.
Thank you,
Geoff Green
