How to Shop for a Mortgage – Don’t take my word for it!

I talk to new homebuyers or homeowners looking to refinance every day of my life.  I love it!  I love helping families in Charlotte to navigate the ever changing mortgage world and buy their first home, move up to that dream home or even refinance the home they have to save thousands of dollars!  It is an exciting time, but to most people it is just plain scary.  People are afraid about the market and aren’t confident about the mortgage process because of all the mess out industry caused a few years ago… a mess we are still clawing our way out of today!

One of the most dreaded parts of buying a home is shopping… not for a home, because that is FUN, but for a mortgage.  Most Charlotte homebuyers feel an obligation to shop mortgage rates because they want to get a “good deal”.  No one likes buying something and then finding out the next day at work that everyone else got the same cheap at a lower price!  The problem is that shopping and comparing mortgage rates can actually be quite dangerous and might cost you time, money and frustration!

When you need a mortgage you should SHOP!  The question is how and for what?  I found a GREAT article today on an industry website that I think will help answer this question.  Here is an excerpt from the article…

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Shop For Loan Agents, Not Rates

Every consumer shops for mortgages and they should. But this is the critical distinction: you should be shopping for the best mortgage advisor. If you have that, you’ll get the best rate. 

Here’s what happens when shoppers focused only on rate get quoted by a good loan agent: Loan agent quotes a rate only after they’ve analyzed the client’s entire financial profile and analyzed their home’s value and condition—also known as pre-approving them. The client will either tire of the pre-approval analytics or be unhappy with the rate and go somewhere else. Then 80% of those cases come back to that loan agent because the competing rate quote was revealed to be incorrect when the other lender actually completed the client’s profile, or the home’s value/condition made the loan ineligible.

Mortgages are extremely competitive so rates and fees are generally the same with most (established, credible) lending firms.  What’s not the same lender to lender is the loan agent’s ability to: (1) advise properly, (2) analyze borrower and property profiles, and (3) close with no surprises. So shop to find the lender and loan agent you feel most confident can perform on these three things. Then work with that loan agent to pick a rate target you can’t or won’t go above, and give them a standing order to lock when they see it. 

These guidelines are for refinancers. For homebuyers, you can’t lock a rate until you’re in contract to buy a home, but once you’re in contract, the same approach applies.

Rate Targeting

Their are two reasons for the pre-approval and rate targeting tactics discussed above: 

(1) A rate quote that flies through the air means nothing. If a loan agent doesn’t issue you written terms after obtaining a full profile on you and your home, then you haven’t received a quote you can count on.  

(2) Rate lows are here and gone in minutes each trading day as mortgage bonds rise and fall on economic and technical trading signals. So if you don’t first get pre-approved then set a rate target with a standing lock order, it’s nearly impossible to hit the lows AND close with no surprises.  

Your loan agent also must be able to brief you daily or weekly on the market outlook, so if you’re not sensing market competence from your agent, then keep shopping. A loan agent must have a strong read on what’s impacting the rate market ups and downs to deliver you the best terms.

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You can read the entire article here http://www.mortgagenewsdaily.com/consumer_rates/233465.aspx

I think this article really breaks it down.  Working with a lender you can trust to get the job done and quote you honest rates and fees is the mort important thing.  Rates are pretty much the same at every bank or lender on the same program.  Often getting the  lowest rate possible on the wrong loan program will cost you thousands over an above average rate on the best program!

If you would like trustworthy service and great terms… give me a call at 980-721-7478.

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