Everyone thinks that the most important part of the loan process is getting the lowest rate. But if I asked you which was more important to you…getting the lowest rate or the lowest cost of money which would you choose?
The reality is no one gets the lowest rate. Most people get a competitive rate. The diffrence between the same priced loan at a specific rate between companies might only be .125%. In other words, the most expensive company might be offering a rate at 5.125 for one point and the lowest might be 5% at one point.
Now this is with all things being essentially equal and this is where the hard part comes in because no one loan is truly the same. As lenders, we try to fit everyone in to the same box but everyone is different. Even if we took the same loan and gave it to two different lenders, they might look at it completely differently. Why you might ask. Because beyond the computer overlays, there are still people required to make decisions of interpretation of various guidelines. and those interpretations could ultimately effect your pricing or rate.
When looking for a rate look for a lender that is going to give you an honest explanation of how rates work. I have heard advertisements for 30 year rates at 3.5%. They make it sound like it is fixed for 30 years but they are obviously trying to trick you in to calling. they are called teaser rates for a reason.
Use some one you trust. Some that has been around, especially these days has a reputation that has allowed him or her to survive this tumultuous period. for the most part, all the bad guys are gone. You are really looking for some one you can relate to. So don’t shop for “best Mortgage rates” . Search for someone you want to do business with. In the long run it will be the best investment you ever make.changes.
