Comparing Rates

All interest rates are not alike.  Many people spend more time, energy and anxiety focusing on a mortgage rate than they do the purchase price or investment potential of the property they wish to purchase.

The after math of the “sub-prime” mortgage mess, where money seemed to flow freely to any and all buyers has resulted in a number of complicated rules which make it very difficult to compare interest rates.  New federal laws often encumber the ability of a mortgage officer from quoting rates until the client has submitted an application.

Mortgage rates vary dramatically based on credit score, down payment, property type, property location, loan amount and many other variables.  Current loan limits for FHA, VA, conventional, confirming and jumbo loans vary as do corresponding interest rates. 

As important as finding a fair rate, is selecting a local, reputable lender who can actually provide the mortgage in a timely manner.  Many mortgage brokers, credit unions and even large mortgage companies are in such a state of flux and are backlogged, that they cannot provide a timely loan approval and are constantly asking for additional documentation.

Online mortgage websites, rates published in newspapers and the like are often dated, may have excessive fees, prepayment penalties, or only apply to loans closing very quickly.  Further, when a mortgage broker is involved they often have no direct contact with the loan underwriting, closing, and funding departments which cannot only add stress to the mortgage process it can put the transaction at risk.  Loan underwriting rules are currently very fluid, and it is very important to deal with a local reputable lender.

Upfront and monthly mortgage insurance, interest rates on second trusts, prepayment penalties, indexes for adjustable rates can make it complicated to accurately compare.  The key is working with a REPUTABLE LOCAL lender and getting a good faith estimate and rate lock form in writing.