Rate Shopping?  PLEASE READ THIS FIRST!

The number one request I receive is, "Please give me your best rate quote". Some mortgage lenders, who know that customers can be swayed solely by the price they hear quoted, will give them a loan quote lower than what the real market is (sometimes a full ¼ to ½ % under), in order to make themselves look super competitive and get more business in the door.

When the surprise comes at the closing table… [a higher interest rate and more fees than what was quoted] the unscrupulous lender knows that many borrowers, weary of the process, will give in and take the higher rate because he does not want to "start all over again"  This is why many borrowers, maybe even a friend or family member, can tell you about a unacceptable experience they've recently had with a Mortgage Lender. 

The bottom line is …It's not what a mortgage lender quotes you that matters, it's what they can deliver.  If you choose a lender based solely on the "best rate quote", you're very likely to get a big surprise later.

There are thousands of lenders out there, but the truth is, mortgage rates, especially with fixed type loans, vary only slightly from company to company on any given day and no one company has a lock on the absolute best rates all the time. Rates between legitimate companies usually vary no more than 1/8% in interest for the same overall cost--period.

Why is that?

Because Banks, Mortgage Brokers and other Lenders get their funds from the same secondary market sources. Simply put, the cost of money is mostly dictated by these sources, not the actual lender. Further, mortgage pricing changes one or more times per day--just like stocks.

So, if Mortgage pricing is, in actuality, pretty much the same with everyone, how do you select the right Mortgage Lender to work with?  When you're comparing Mortgage Lenders, you'll need to ask them pertinent questions.  Here's 7 quick questions to ask:

1.  Are you a  Banker, a Mortgage Banker or a Mortgage Broker?  Bankers and Mortgage Bankers have their own limited in-house mortgage loan product line they represent, and will try to put you in that product, regardless of your needs.  Mortgage Brokers, on the other hand, represent numerous companies, and typically have hundreds of programs to recommend, as well as the ability to compare lenders pricing to find the most cost effective way to borrow.  Working with a Mortgage Broker like me (as opposed to a Bank or Mortgage Banker) is a definite advantage.

2.  Are you Licensed?  ALWAYS work with someone who is licensed, like myself.  For example, in Washington State, the only people required to be licensed are true Mortgage Brokers, who must earn a Mortgage Broker's license from the state, and carry appropriate bonding.  There is no licensing required to be a loan officer, even at a bank.  If they deceive a client, and are confronted with their deception, they can simply quit and go to the next mortgage company.  In other words, if a loan officer deceives or lies to a client, there is no personal  accountability for that particular person.  The best thing to do is always work with a licensed individual, like a true Mortgage Broker.  That way, they have their license at risk in every transaction, and there is accountability.

3.  How long have you been in the business? - 10 years should be the absolute minimum you accept.  Anything less, and you may end up working with someone who doesn't have the experience to close your mortgage transaction with a minimum of stress to you. 

4.  What kind of Mortgage Industry education do you have? - Mortgage Lending is very complex; the best Mortgage Lenders will have taken numerous Mortgage Industry specific classes & seminars.

5.  How long has this company been in business? - 10 years should be the minimum.  You'll want to make sure the company has been through several up & down rate cycles, and is not simply depending on refinance transactions while mortgage rates are low.  The last thing you want is the company you're working with to close it's doors in the middle of your transaction, as we've seen many refinance based companies do in the past few months.

6.  What is your Job Title?  The best Mortgage Lenders are Mortgage Consultants, who consult with you to determine your mortgage goals, then see what kind of product fits YOUR needs.  Others, who call themselves Loan Offices, Loan Agents, Loan Representatives, etc., can be primarily motivated to put you in a mortgage product that makes themselves more money; it may not fit your particular needs very well.

VERY IMPORTANT - If a Mortgage Lender quotes you a very low rate within the first minute of your conversation with him/her, ask them: 

7. How can you quote me a Rate that's applicable to me, when you haven't found out who I am, what my credit & income is, and what my ultimate financial goals are? - Legitimate, ethical & honest Mortgage Lenders will ALWAYS ask you questions upfront, to find out who you are, what your credit & income & job stability histories are (to try to ascertain what you can qualify for) and what are your financial goals.  Since the best Mortgage Lenders provide individual Mortgage Solutions, designed to accomplish your unique financial wishes, it's impossible to honestly quote you a rate, that's directly applicable to you, if they haven't bothered to find out who you are & what you're hoping to accomplish.

For the best possible Mortgage Lending experience, make sure the Mortgage Lender you work with is Licensed, is someone you trust, and with whom you are comfortable.

To learn more about my Mortgage Industry experience, Click Here.

To review Testimonials from a few of my past Clients, Click Here.

To contact me directly (for further information), Click Here.