Tip #1: Always Shop For Home Mortgage Rates
Do not blindly accept a Realtor or Builder referral to apply for a Home Mortgage through their preferred lender. Many times they will say, “We work closely with this guy and he gets the job done”. Translation: “We play golf together and he buys the beer”. Remember, the Realtor won’t be paying the bill each month for another 30 years, you will.
Mortgage Loan Officers that work from a referral network of Realtors and Builders do not have to get competitive Home Mortgage Rates since they have a steady stream of “Drones” (people that are known to them and do not store) calling them. Shop around, get the lowest price Home Mortgage Rate, then if you are likely, approach the “preferred” Loan Officer you were referred to and ask him to match with the quote.
If you apply for a Home Mortgage via a preferred lender without shopping, you may pay hundreds or even thousands of dollars in additional expenses.
Tip #2: Call For Home Mortgage Quotes After 11:00 a.m. Eastern Time
Mortgage Rates change daily and at times midday. The prior day’s prices generally expire by 8:30 a.m. the following morning. Generally, Home Mortgage Rates are printed every day from 11:00 a.m. Eastern time. To make sure you are receiving Home Mortgage Rates in the present day and not a mixture of rates from the previous day from several lenders and the current rates from some other lenders, always do your rate shopping after 11:00 a.m. Eastern time.
Get all your estimates after 11:00 a.m. Eastern time.
Sometimes Home Mortgage Rates alter midday because of a volatile bond market. While this occurs, some Home Mortgage Lenders will adapt the Discount Points due to their prices with respect to the new bond costs and publish new Home Mortgage Rates for that day. Other Lenders may continue to honor their morning rates.
If you are buying a home, inform the Home Mortgage Loan Officer you’re Rate shopping and you have a “ratified contract” to buy a house. Tell him you intend to make a decision and Lock-In a rate on such afternoon, but you must check a couple other lenders. If he asks you how his prices compare to the others, tell him he is the first person you’ve called. If you are refinancing, tell the Home Mortgage Loan Officer you’re ready to apply for a Refinance Home Mortgage today. If you do not tell him that, he may provide a fake Home Mortgage Rate quote.
Loan Officers know you will probably speak to another lender with lesser Home Mortgage Rates and the only way he could be sure that you call him back would be to give you a fake quote which appears to be the cheapest. He’s hoping you’ll rate shop for many days and figures you will call him back in a day or two because he provided a low, bogus rate quote.
How are you going to compare estimates if you do not know which quotations are real and that are part of a bait and switch plan? The only way to ensure getting real quotes is to box in the Home Mortgage Loan Officers by making them believe you are ready to Lock-In a Home Mortgage Rate immediately.
When you telephone a Mortgage Lender, request the “Total Points” (Discount Points, Loan Origination Fee, Broker Points) for every Home Mortgage Rate. Some lenders will only estimate the Discount Points and deliberately exit the Loan Origination Fee. You won’t learn about the 1.00 Point Loan Origination Fee before you apply for the Home Mortgage. At the time, the Loan Officer figures you’ll just accept it because he has your program and pulled your credit report. In addition, Mortgage Brokers often neglect to mention their Broker Fee.
When you’re quoted the Total Points, especially inquire if there is an additional Loan Origination Fee or Broker Fee being charged. You truly have to nail down this once you talk to a Home Mortgage Loan Officer.
Also, request a listing of ALL other fees that will appear on the Good Faith Estimate that you will be committing to the Lender or Broker. Make sure they include their Credit Report and Appraisal Fees. Some lenders charge you lump sum fee and that includes the Credit Report and Appraisal Fees while other lenders will itemize every fee. Keep it simple and ask for all fees, including the cost of the credit report and appraisal fees.
Don’t get confused by Title Company, Attorney Fees or Escrows. A lender will estimate these on your Good Faith Estimate, but these fees are not related to costs associated with a Mortgage Rate quote. The total required for your escrow account will not change from lender to lender and Title Company and Attorney Fees aren’t being charged by the bank. Don’t include them on your comparison.
If you’re purchasing a house and you need 60 days to close, be sure you specifically request Mortgage Rate quotes using a 60 Day Lock interval. Some Home Mortgage Loan Officers will estimate rates with 15 Day or 30 Day Lock periods since the Discount Points for briefer lock periods are less than speed locks for longer intervals. Quoting a Home Mortgage Rate with a 15 Day lease interval obviously gives that Loan Officer an unfair edge. It’s also a waste of the time because the quote is not real if you can’t settle on your loan within 15 days. Always specify a 60 Day Lock-In if you’re purchasing a house. Ask for 45 Days if you are refinancing, but you may be able to have it done in 30 days if you’re very diligent and telephone your Home Mortgage Loan Officer twice a week for a status of your application.
If your rate lock expires, the lending institution will re-lock you in the greater of the original rate or the current rate when you opt to re-lock. That’s