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RATE SHOPPING??? |
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...read this FIRST! |
(No matter WHO you use, print this page for future reference)
How Do I
Get The Best Rate? It is never about the best rate. It is about the
best MATH, period. There is NO other answer than that. So
why isn't the lowest rate the best deal? First, lower rates come with
more points and fees. That is not the real issue, however. There
is a break even point to contend with when paying points and fees, tax
deductions to figure out. In the case of a purchase loan, points are tax
deductible in the year that you pay them. That is good, but then again,
so is the interest you think you are saving. With refinances, the points
are usually only deductible only over the full term of the loan. That
could be 30 years, making the benefits and the break even point years down the
road. So why do lenders advertise really low rates with all of those
points and fees? Because they know most consumers look at the rate, not
the math. That advertising strategy works really well. We don't
play that game. How about the lowest APR? Generally, the more
points you pay, the lower the APR. True, but not the answer. We
take apart each rate and fee quote to find out what the best MATH is,
period. It only takes a few seconds for a professional to do it for you
using a computer. After that, it's your
decision.
What Causes Mortgage Rates To Change?
Did you know that one or more rate
changes per day is normal? Most people do not know that. Rate
quotes can easily change when you call back later that same day. In the
lending business, a rate change can also include a change in the point cost
for the same rate. In other words, a rate can be no points in the
morning, then later that day cost ¼ point. That is a rate change to
lenders. Did you also know that regular fixed mortgage rates are not
directly affected by what the Fed chairman Ben Bernanke does? Mortgage
rates change primarily based on: 1) the perception of inflation, 2)
times of uncertainty and 3) the movement of money in and out of the
stock market--that's it. When a piece of news shows weakness or
uncertainty in the economy, that helps rates fall. The opposite is also
true. A drop in the unemployment rate, a rise in durable goods orders, a
rise in the consumer confidence index--rates go up. These influencing
factors can present themselves all the time, many without warning, affecting
mortgage rates instantly. There is no "delay". It
doesn't take time to "filter down" like some people think.
Reading the paper for quotes doesn't really work because the information is
old by the time you read it. Radio, TV and billboards are not the answer
because the details are always missing. They just want to get you on the
phone. Competitive lenders can deliver nearly identical rates to each
other. Most borrowers don't ask the right questions and focus only
on the interest rate. A professional will always be competitive and
deliver what is promised.
How Do You Get The Best Mortgage Rate?
It is never about the best rate. It is about the best math. There
is no other answer than that. So why isn't the lowest rate the best
deal? First, lower rates come with more points and fees, but that's not
the real issue either. There is a break even point to contend with when
paying points and fees, tax deductions to figure out and your available cash.
In the case of a purchase loan, points are tax deductible in the year that you
pay them. That is good, but then again, so is the interest you think you
are saving. With refinances, the points are usually only deductible over
the full term of the loan. That could be 30 years, making the benefits
to you and the break even point years down the road. So why do so many
lenders advertise really low rates with all of those points and fees?
Because they know most consumers look at the rate, not the math. That
advertising strategy works really well. How about the lowest APR?
Generally, the more points and fees you pay, the lower the rate and APR.
True, but not the answer. Loan officers can take apart each rate and fee
option to find out what the best math is for you, period. It only takes
a few seconds for a professional to do it. As long as you qualify for
various options, the final decision is yours.
The Bottom Line Even
though HOTLOANS.COM is also a direct
lender, many of our broker relationships often produce better deals for the
consumer. The bottom line is that there is no one source that is the
cheapest. If one lender was always the cheapest, everyone would know
about it eventually, right? The only other way most lenders can compete
with one another is to somehow convince the public that they have some "secret
way" of providing lower than market rates. The market is the market and
you pay for it one way or another.
Only work with a professional
mortgage company where the loan officers are skilled at the mathematics and
can explain it in plain English. Click here for today's live rates. Ask for meaningful references such as CPA's or Realtors,
not just past customers. Don't gamble with something as important as your mortgage. Our business philosophy has a little more info if you need it.
Best regards,
HOTLOANS.COM
Call us at 1-800-797-1855 or e-mail us at info@hotloans.com