Blog Category: mortgage shopping
If you type “Mortgage Calculators” into Google you will get over 2 million results and Google’s simple mortgage calculator at the top. The Google mortgage calculator will give you a rough idea of mortgage monthly payments based on a simple calculation of the interest rate and mortgage term. It doesn’t answer any details, like: how many payments do I have to pay in order to pay off my mortgage? In 15 years how much mortgage will I have left to pay if I increase my monthly mortgage payment? What happens if you want to increase or decrease the interest rate, or change the amount of years of your home loan? With all the mortgage loan calculators out there isn’t it best when you can see the big picture of your home loan payment and how it can work for you.
It may seem odd that someone in the mortgage business wants to discuss how to help consumers find the best mortgage lenders. People search for mortgage providers every day without the benefit of professional help. So, I figured why not help people whether they find their way to me or someone else? Below I’ve listed the most important mortgage questions that you need to ask before you apply for a mortgage loan.
Who doesn’t want something cheaper? But who doesn’t want it faster, better and delivered on time as well? It is life’s constant struggle. We work very hard for our money and want to be judicious in spending it. We want the $5 hamburger for $4. We want the $35,000 car for $32,000. We want the $500,000 house for $485,000, and if the same house were priced at $485,000 we’d arbitrarily want it for $470,000. We always want a deal! But are we just creating our own problems? And should we be shopping for the best price or the best value? There is a big difference between price and value when it comes to mortgages.
It never ceases to amaze me how people treat the most expensive transaction that they will ever do in life as a commodity. Would you get surgery at McDonald’s if they got into the health care business because it was the cheapest place to get it? Or would you talk to numerous different doctors based on experience, referrals, track record, and interaction with their staff and systems? I know as you read this blog you would say the answer is that you’d go with
Why do I feel like when someone calls me to talk about interest rates, they are calling multiple people, scouring the internet, and getting a lot of misinformation? I have a good friend who works at Freddie Mac (FHLMC) who I met for dinner recently. Over dinner conversation she mentioned that when FHLMC sends out their report on average interest rates. They get calls daily from homebuyers and people interested in refinancing. These people ask how to apply with FHLMC for that rate! My friend says the callers will say, “Can I get that rate from you that you guys reported, I can’t find it anywhere else!” They then have to explain that FHLMC is not a lender. FHLMC is a corporation authorized by Congress to provide a secondary market for residential mortgages.
Getting a loan is easy, right? You apply for the loan, you send in some paperwork, someone appraises the home, and if your credit is OK, a little bit later, you get a mortgage. Right? It should be that easy, I agree. We have the technology and desire in place to make the mortgage process easy, I believe. The problem with assuming you can shop anywhere, call anyone, and get a loan through any source is that the above is not only not true, the truth is completely the opposite. Getting a mortgage has become the most arcane, complicated, minutia filled experience ever. It is worse than going to the Department of Motor Vehicles, by far.
I lost a client recently, mostly because she was a price shopper, and would not answer my questions. And then I heard from her again, mostly because she was a price shopper, and would not answer my questions! Confused? I was too. It has to do with currencies, underwriting rules, foreign countries and more. Sounds mysterious. I’ll explain.
There was an extensive report done by a research, marketing and communications firm based in Washington, DC. The firm has more than 30 years in the field of research with deep experience in the fields of financial services, housing and technology. I want to show you the results of some of this research as it relates to the mortgage industry and how it will help Realtors and mortgage consumers better pick a mortgage lender.