The Truth About Shopping for Mortgage Rates

With so much lender advertising focusing just on rates, you may not be aware of the importance in choosing an experienced, reliable loan professional who can match you with the appropriate loan program. Good loan officers and mortgage brokers may quote today's rate when asked, but they will quickly add they need to know more about you to determine the best program for your individual situation. So rather than asking questions, you should be prepared for, in fact looking for, a loan officer who asks you questions about your credit history, employment, income, down payment, and future plans.

With the ever-changing variety of loan programs, there's a lot to learn about what's available and which program could suit you best. Here are a few loan options: Fixed rate. 15 year, 20 year, 30 year. Adjustable rate. Adjusts after 6 months, 1 year, 3 years, 5 years, 7 years or 2-step. Low down payment. No down payment. 80% first/20% equity. Over 100% LTV. Interest only. Buy-down. Reverse. Convertible. Balloon payment. Bi-weekly payments. Conforming. Non-conforming. Conventional. FHA. VA. First-time home buyer. Special government programs. Self-employed. Full documents. Low documents. No documents. Credit-challenges. Bankruptcy. Unique property. Whew! And there's more, which is why finding a knowledgeable, trustworthy loan professional should be your first consideration.

Also, rates are time sensitive. The eye-catching ad you see in the newspaper was probably prepared at least five days ago. Rates may change several times a day as well, and, without a lock-in, a quote doesn't mean a thing. And don't you wonder how every lender claims to have the best rate? Retired mortgage banker George Chaney said, "A buyer who rate shops may be getting quoted today's rate from one company, tomorrow's rate from another, and a bet on next week's rates from a third. It's like comparing apples to oranges to pears, and the clients will never know what they're getting. In reality, the number one priority for the average home buyer should and must be the quality of the counsel they get, how the products meet their needs, then the rate, then the costs to close."

According to Brian Sacks, Branch Manager of Integrity Home Funding, in Owen Mills, Maryland, and expert on assisting borrowers nationwide with credit challenges and bankruptcies, "Consumers don't usually shop for the cheapest attorney or physician when they need help in those areas, but they'll shop strictly by rate when they need a mortgage. That's mostly because they don't understand the loan options available to them. They're thinking plain vanilla 30-year fixed rate. They don't realize a mortgage broker will find them the best loan program first, then find them the best rate. Plus there's the strange one-upsmanship caused by family and friends comparing rates and bragging if they have a rate that's one-eighth less. It's natural for everyone to want the lowest rate, but the most important consideration is getting the right loan program with the best rate possible for that particular borrower's circumstances."

Tom Ward, CEO/Founder, Majestic Mortgage Corporation, headquartered in Vernon Hills, Illinois, agrees: "It's almost universal that the first question on first contact with a consumer seeking a mortgage is: 'What's your rate?' It's no different in Florida than in Washington state. Consumers are conditioned by advertising, and not just by online lenders like Lending Tree, that price is their only concern."

Comparing Internet rates to traditional lenders, Tom adds, "Our own comparison of note rate to note rate and APR to APR shows Internet 'best price' claims proved hollow. The Wall Street Journal has also reported on the fallacy of 'best price' on the Internet."

"If it sounds too good to be true, it is," says Brian Yampolsky, Owner of Orion Mortgage, in Phoenix, Arizona. "Listen to that voice inside your head that tells you when to be skeptical. It's there for a reason. Often times, lenders put their best foot forward? They'll make assumptions on certain factors that can affect the rate, such as the size of the loan, the amount of down payment, if a primary residence will secure the loan, if the credit scores are high enough, etc., etc. If you don't fall into that box of assumptions, then it's unlikely you would be able to get that rate.

"So, whether you're buying a new home or trying to decide if it's worth refinancing, do yourself a favor. Forget the allure of artificially low rate ads and ask someone you know and trust for the name of a trusted mortgage broker. He or she should be able to educate and advise you on how to save your money and time and prevent you from making costly mistakes when choosing your next mortgage."

These days, there's another consideration that's more important than rate: Competence. Whether or not you're able to buy the home you want may well depend on how reliable your loan officer is. In hot real estate markets, sellers are taking backup offers with higher sales prices. As a result, they may hope the first transaction falls through. Under normal circumstances, if your lender doesn't comply with a specific contract condition, the seller would let it slide. In a hot market, where more lucrative backup contracts are common, if your lender misses a deadline in the contract, it could cost you your dream home. The best rate in the world is worthless if incompetence means your transaction doesn't close.

So how do you find a loan professional you can trust? Start with referrals from people you know: family, friends, real estate agents, escrow officers, attorneys, accountants? A referral is unquestionably your best bet at finding a loan officer with a proven history who knows how to close a loan.

Good luck with your search for the loan officer and loan program that are right for you. Obtaining a home loan can be stressful, but working with an expert will lower the anxiety and better ensure a positive result.

About the Author:
Sharon Hassler was a successful loan officer and real estate agent in Southern California, then served as Communications Manager for First American Title-Arizona for 11 years. She is President of Go Get Experts, owner and operator of GoGetLoan.com, a web page directory for mortgage brokers and loan officers, along with GoGetEscrow.com, GoGetNotary.com and GoGetHome.com.

Copyright © 2005, Go Get Experts, for GoGetLoan.com. All Rights Reserved. Permission to reprint this article is granted if the article is reproduced in its entirety, without editing, including author's information. When using this article in magazines or newsletters or online publications, please include the full URL or a hyperlink to http://www.GoGetLoan.com

---

Sorting through mortgage elimination programs

Mortgage elimination programs are all the rage these days. In... Read More

What Are Mortgage Brokers And Why To Use One

"Mortgage" is formed from two words: the French word "mort"... Read More

Adjustable Rate Mortgages - Understand the Benefits Compared to a Fixed Rate Mortgage

Adjustable rate mortgages can be very tempting to home buyers,... Read More

Tips On New York Mortgage Refinance Loan

Many homeowners want to know if it worth taking a... Read More

Securing a Cheap Home Improvement Loan

Finding a cheap home improvement loan can be a challenge... Read More

Jacksonville Florida Real Estate Mortgage Home Loans - Get the Best Rate Everytime

There are hundreds of mortgage companies in the Jacksonville real... Read More

Need a Mortgage, Refinance or Equity Loan? Learn What it Takes, Before Applying

Do you know what it takes to qualify for mortgage... Read More

Mortgage Questions to Ask Your Lender

Buying and financing a home today can be overwhelming. Here... Read More

Low Home Mortgage Interest Rate - Finding the Best Mortgage Rate

Interest rates are at an all time low, making now... Read More

Types Of Home Equity Loans

There are two broad types of home equity loans:Term loans:... Read More

5 Steps to Getting on Top of your Mortgage

Getting on top of your mortgage so you can pay... Read More

Think You Cant Get a Mortgage?

You've finally found that dream home that you have always... Read More

Debt Counseling ? Healing Touch for the Ailing Finances

The financial stories remain similar over the months and the... Read More

How to Shop Around for the Cheapest Mortgage Deal Online

Before you start shopping around for a mortgage, you need... Read More

Residential Mortgage - Finding The Best Home Mortgage Lender

Most people approach the act of getting a home mortgage... Read More

Bad Credit Loans Authenticate What Is Positive About Bad Credit

This might not be the front page news but it... Read More

Housing Bill - Changes in the Right To Buy Scheme

Presently council tenants are able to purchase their rented property... Read More

Borrow on a Budget: Getting the Cheapest Home Improvement Loans

Getting the cheapest home improvement loans isn't always easy. It... Read More

What Exactly is a Mortgage Broker and How Can He/She Help You Save Thousands on Your Mortgage?

Have you ever heard of a mortgage broker before? If... Read More

Mortgage Terms Explained

When you are hunting for a mortgage, you will find... Read More

A Guide to Getting Bad Credit Home Improvement Loans

You might be wanting to look into bad credit home... Read More

Home Equity Loans Categories

Fixed Rate Mortgages: These loans have a fixed rate of... Read More

How To Determine The Price Of Your Home

Why is it that some homes sit on the market... Read More

Gearing Up for Bad Credit Mortgages

Mortgage would have never happened, had mortgages been a no... Read More

Mortgage after Bankruptcy - Bankruptcy Discharged Yesterday? Purchase a Home Today!

So you have been through a bankruptcy and surely have... Read More

Is an ARM Right For You?

Let's start by taking a look at 7 key elements... Read More

Alternative Options For Rising Interest Rates

As interest rates have risen in the last six weeks... Read More

Mortgage Loans Explained In Plain English

With the many different kinds of mortgage loans out there,... Read More

Poor Credit Mortgage Reigns High Among Mortgages Available to Bad Credit Borrowers

Like a big brother keeping notes of the erring behaviour... Read More

Understand a Real Estate Appraisal

Happy New Year. Make a difference this year. "Pay it... Read More

How a Commercial Mortgage Can Help Your Business

A commercial mortgage or commercial remortgage is a business loan... Read More

Mortgage Refinancing Companies -- Choosing The Right One

Searching for a mortgage refinance company can be a daunting... Read More

The Best Way To Get The Right Mortgage

Are you thinking of buying a home? If so, then... Read More