Interest rates are up, not a substantial amount, but enough to remind everyone that interest rates can go up as well as down. Rates are up about .25% to .375%, depending on the loan product and some other variables. While I find that insignificant, a homeowner who wanted to refinance to a Conforming 15 Year Fixed Rate at 3.125% who is now being quoted 3.5% is astonished. First, most of us forgot that rates can go up, we thought they only had one trajectory….down. Second, when the 15 Year Fixed Rate was at 3.125%, the client was hoping for 2.875%! And if rates got to 2.875%, people would hope for a little more. The financial psyche of we humans is fascinating, the deals we get are never good enough! We always want more.
Blog Category: mortgage shopping
One motto I follow in life is: do not be sold, be educated. One of the favorite t-shirts that I have is an old, tattered blue t-shirt that has the words “I Need Advertising To Help Me Decide” written across the front. I love the sarcasm and the not so subtle message. It is discomforting that so many people let themselves get sold, as opposed to taking the time to learn, study, analyze and decide using proper business analytics. I see this in the mortgage world more
Going dark. All salespeople have experienced this, no matter how good. You educate a potential client, you spend hours and hours with them answering questions, you create a relationship, and you truly seek to help them to earn your commission. And then it happens, they go dark. No contact. No return calls. No email reply. No nothing. It is eerie. You start to wonder what you did wrong.
It seems we are doomed to repeat our mistakes. Mankind has been jumping over bushels of hundred dollar bills to reach the quarter in the corner, since the dawn of currency. I have a number of new stories every week, of consumers who look so very hard for the best deal, they overlook the fact that they may be dealing with a disreputable provider, or may not get what they expect, or may be getting a promise that won’t be kept, or even worse;
When you buy a new home, or refinance, it can be a nervous and exciting time. And getting excited and nervous causes people to over analyze and sometimes make poor decisions. Sometimes a client will ask for a lower rate, by paying discount points. Each discount point is 1% of the loan amount, or $1,000 per $100,000 in mortgage. It sounds great to get a rate that is a half percent lower than what you hear about in the news or see online (and shopping for rates online is not accurate, see this story for more on that), but what about the costs?
A large, well known bank, who the client described as “well established with comparable rates, so we are going with them”, has rejected a home buyer’s loan after almost 90 days in process. The seller has already given extension after extension. Now the sellers are furious, the buyer’s are literally in tears, and are asking me to take over the loan and get them to settlement in 7 days. That is impossible, no one can get a new loan done that fast. The husband told me, in tears, that he had to have this house to move into, and that he was desperate for more space for he and his growing family. Mortgage consumers need to make better choices, and not shop by price alone.
Yes, there really is a loan officer in the doughnut at times. What I am talking about is how business referrals are sourced in the mortgage industry. I’m afraid business is still referred the old-fashioned way, not by who earns it, but by who brings the freshest doughnuts to the Realtor office meeting, who picks up the tab at happy hour, who buys your Realtor tickets to the hockey game, and who hangs around the most in the realtor offices. Does this sound like a professional way to analyze a business vendor?
Often times a Realtor will suggest to a homebuyer that they use the real estate company’s “in-house” lender. Realtors don’t usually push these lenders on their buyers, but they are definitely suggested many times. Every wonder why? It is important to know how these lenders are structured, and how they operate.
Everyone wants to get the best deal reasonably possible when getting a mortgage. I say reasonable, because although some lending sources advertise what seem like unreal rates, most consumers are smart enough to discount what appears to be a free lunch. The reality is that even with hundreds of competitors, rates never vary by much more than 1/8% in rate. But hey, who does not want every 1/8% to be in their favor?! I do. So go for it. But here is the problem with shopping for that best 1/8% deal online: