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Realtor, Loan Officer, Financial Professional,
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Are
you a Rate Shopper? As you are shopping for a loan, make
sure you are working with an experienced, professional loan officer. The
large financial investment you are making is far too important to place in
the hands of someone who is not capable of advising you properly and
troubleshooting the issues that may arise along the way. But how can you
tell?
First, make sure the loan officer will guarantee IN WRITING their closing
costs, interest rate and points charged. Unfortunately, there are too many
unscrupulous people in the mortgage business. If they wont put it in
writing, they don't know what they are doing or they are trying to bait and
switch.
In addition here are FOUR SIMPLE QUESTIONS THE LOAN OFFICER ABSOLUTELY MUST
BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS RUN DON'T
WALK RUN TO SOMEONE WHO DOES!
1) 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 sometimes trends in the same direction as
Mortgage Bonds, it is not unusual to see them move in completely opposite
directions. DO NOT work with someone who has their eyes on the wrong
indicators.)
2) What is the next Economic Report or event that could cause interest rate
movement? (A professional lender will have this at their fingertips. For
an up-to-date calendar of weekly economic reports and events that may cause
rates to fluctuate sign up for my newsletter above)
3) When Greenspan and the Fed change rates, what does this mean and what
impact does this have on mortgage interest 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)
4) What is happening in the market today and what do you see in the near
future? (If a loan officer 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 weeks
newspaper, and probably not a professional with whom to entrust your home
mortgage financing.)
