As a Mortgage Professional I get a lot of phone calls from people who compare mortgage rates as a past time, otherwise known as "rate shoppers". I completely understand that most people want the absolute lowest rate that they can get on a mortgage. However it still ticks me off when people "rate shop" and here are a few reasons why:
1. I can't lock your interest rate in until you apply for the loan. In fact most Mortgage Brokers can't lock the interest rate in until they have taken an application. Some Mortgage Brokers actually have to wait until the loan has been approved by an underwriter to lock the rate in. And as we all know, mortgage rates change on a daily basis so why quote a rate that I can't guarantee until I lock it in!
2. On purchase transactions I can't lock the interest rate in until the person has a Purchase Contract on the property. It really irks me when someone calls and tells me that they are comparing my rate with another lender and they don't even have a purchase contract on a property. Heck they might be 2 or 3 months away from finding a property.
3. Last of all and this is the obvious one! Many Mortgage Brokers will quote a ridiculously low rate to entice the prospective borrower to do an application and then afterwards tell them that they don't qualify for that rate for some reason or another. Or even worse they will tell them all along that they are getting a great rate and then a few weeks later at the closing table the poor borrower/client finds out that the rate is substantially higher than what they were told! This is known as bait and switch! If you ever run into this situation don't feel pressured into signing the closing papers. Make sure that your Mortgage Broker is delivering what he or she promised!!!!
Comparing Mortgage Rates
1. I can't lock your interest rate in until you apply for the loan. In fact most Mortgage Brokers can't lock the interest rate in until they have taken an application. Some Mortgage Brokers actually have to wait until the loan has been approved by an underwriter to lock the rate in. And as we all know, mortgage rates change on a daily basis so why quote a rate that I can't guarantee until I lock it in!
2. On purchase transactions I can't lock the interest rate in until the person has a Purchase Contract on the property. It really irks me when someone calls and tells me that they are comparing my rate with another lender and they don't even have a purchase contract on a property. Heck they might be 2 or 3 months away from finding a property.
3. Last of all and this is the obvious one! Many Mortgage Brokers will quote a ridiculously low rate to entice the prospective borrower to do an application and then afterwards tell them that they don't qualify for that rate for some reason or another. Or even worse they will tell them all along that they are getting a great rate and then a few weeks later at the closing table the poor borrower/client finds out that the rate is substantially higher than what they were told! This is known as bait and switch! If you ever run into this situation don't feel pressured into signing the closing papers. Make sure that your Mortgage Broker is delivering what he or she promised!!!!
Comparing Mortgage Rates
If you want to compare mortgage rates then take my advice. Get the name of a trusted Mortgage Broker from a friend or a family member. Heck, get two or three names! Then meet with all of them to see which one you will consider using as your Mortgage Broker. Interview them for the job if you will. Find out what type of mortgage loan programs they offer and learn as much as you can from them. Get a list of what their fees are so that you can compare. After meeting with at least two Mortgage Brokers make a decision on who you feel you can trust.
Finally, get pre-approved with your Mortgage Broker and learn as much as you can about the loan program that will best fit your needs and then lock the interest rate in when you feel the time is right! Once you lock in the interest rate get proof from your Mortgage Broker that your rate is locked in and find out when the lock expires. From this point on just let your Mortgage Broker go to work on your loan and forget about what rates are doing as you are already locked into a rate!
If and only if you feel like your Mortgage Broker is not treating you fairly then call your Mortgage Broker and explain your concerns. If you still feel like your concerns aren't being resolved then contact the other Mortgage Brokers that you interviewed and explain your situation. Compare their mortgage rates with the rate that your Mortgage Broker is offering!
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