TRUE or FALSE: There is “one rate” that all mortgage companies offer on any given day.
Today I met with an owner of an insurance agency. After seeing that interest rates varied by as much as 0.375% between lenders for the same loan, he said: “I thought there was one rate for mortgages on any given day?”. He admitted that he knew fees could be different, but had no idea that the actual interest rate could vary as well.
Surprisingly, he’s not alone.
While interacting with financial advisors, insurance agents and even real estate agents, we have learned that there is a great opportunity to provide education in this space. For one reason or another, professionals outside of the mortgage industry tend to have surprisingly little knowledge of the mortgage market & process. This may make sense as they don’t “do” mortgages, nor do they receive compensation on them, but it is hard to argue that mortgages are not relevant in the world of financial planning….or real estate for that matter!
The truth is that rates WILL vary between mortgage lenders (as will fees, the personality of the loan originator, the speed at which they can close your loan and the technology in place). What remains consistent in all mortgage situations is this:
Your choice in a mortgage lender will have a lasting impact on your finances.
The few weeks it takes to complete a mortgage loan will result in a new debt payment – one which is determined based largely on the interest rate you select (in addition to loan term, loan amount and other factors). When all else is equal – a higher interest rate means a higher payment for the same mortgage amount. So consider the long-term impact of a loan’s rate – not just a perceived “ease” of a transaction in the short term.
If you are looking for some helpful hints to keep you sane as you wrangle the mortgage shopping process, here are two suggestions:
Don’t fall victim to technology
Ask yourself: Would you complete a paper application if it meant saving $50 to $100 every month for as long as you owned your home? If so, then don’t let an “app” guide you astray. Despite what certain companies want you to think, the mortgage process isn’t really that hard (it’s more of an inconvenience). Regardless of how you obtain your loan, you’ll be left with a monthly mortgage payment for 120, 240 or 360 months. The mortgage process, itself, is a short-term inconvenience at most.
Protect your personal contact information
If you have ever entered your phone number on a mortgage shopping site before, you likely received multiple phone calls every hour for days. Chances are you will NOT do that again. There are plenty of ways to learn about mortgages in a safe way. MortgageCS allows you inquire about specific loan programs and even interact with loan officers directly – without giving out this private information. As a result, you remain in control of the contact process and once you find the best fit – you can then decide to share these details.
In closing, and just in case it hasn’t been obvious yet, mortgage rates CAN & DO vary significantly between mortgage lenders for several reasons. To be safe, take your time, and ensure you end up with a great deal by focusing on the end goal. Using MortgageCS keeps it straightforward and simple, so get started today at MortgageCS.com.