Shopping For Best Mortgage Rates
Advice For Shopping For Best Mortgage Rates:
Many mortgage loan borrowers naturally go shopping for best mortgage rates, especially when refinancing their current home mortgage loan. Unfortunately, there are so many misleading advertisement out there where the intent of mortgage lenders is to lure the mortgage applicant in and do a bait and switch. Advertising when shopping for best mortgage rates by advertisers is highly regulated by the individual states but still advertisers of mortgage rates advertise their mortgage loan programs like car dealers do. When you go shopping for best mortgage rates advertised under 3.0% from mortgage companies, one of the things in the fine print and disclosures is that you may need to pay points to buy down the mortgage rates. When shopping for best Mortgage Rates, shoppers or anyone viewing the advertisement, especially television or cable tv advertisement, do not post these disclosures in larger print nor do they give you enough time for the viewer to review it.
Oldest Trick In The Book When Shopping For Best Mortgage Rates; Bait And Switch Advertisement Method
The main goal from advertisers of mortgage rates is to have the viewer call in to their mortgage company and speak to a live person. As mentioned above, you will probably see mortgage rates advertised at 2.75% when par mortgage rates are actually at 3.5%. To get a 2.75% mortgage rates, you might have to pay 5% points or more or maybe it may not even be possible to get those mortgage rates. When the viewer call in to the advertising mortgage company, the person taking the call will probably take the mortgage application, run credit, and avoid discussing mortgage rates. Nobody can offer a public mortgage loan applicant a given mortgage rates unless a licensed mortgage loan originator has fully qualified the mortgage loan borrowers income, asset, debt, liabilities, credit history, credit scores, and debt to income ratios. Mortgage lenders are not like used car dealers and cannot be offering mortgage rates with huge spreads without qualifying the mortgage loan borrowers full credit and financial profile. The mortgage rates quoted is also not a guaranteed until the mortgage rates have been locked.
Locking Mortgage Rates
Most mortgage loans are normally closed in 30 days from the time the mortgage loan originator gets the proper signed mortgage application, disclosures, and mortgage loan documents. The maximum lock period to lock mortgage rates is 30 days. Short term pricing and locking of mortgage rates are of no use to the mortgage loan borrower unless the closing will be done within that short term period.
Short Term Mortgage Rate Lock
Mortgage rates are much lower for a shorter term locking period. An unethical mortgage loan originator may quote you lower mortgage rates on a 7 day lock fully knowing that you cannot close the deal in the 7 day period and need to relock the loan at higher mortgage rates or pay points after the lock period expires. This is against the law but many mortgage loan originators still practice this unethical act in order to lure a mortgage loan borrower to their company.
Annual Percentage Rates ( APR ) Is Easily Manipulated And Can Be Misleading When Shopping For Best Mortgage Rates
The Annual Percentage Rates which is also known as the APR is easily manipulated and can be misleading to mortgage loan borrowers. The APR is the cost and fees associated in a mortgage loan borrower getting that loan but many mortgage lenders will manipulate the APR by not including certain third party fees and disclosing it that the borrower will pay outside closing or eliminate such fees altogether. Although the APR can be helpful in many ways, do not count on it. Ask the mortgage lender what they charge in points and origination fees. If it is zero, you are in excellent shape. Ask your mortgage lender what points they charge, if any.