First: make sure you are working with an experienced, professional
loan officer. The largest financial transaction of your life is far too important to place into the hands of someone
who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?
Here are three simple questions that your lender must
be able to answer correctly.
IF THEY DO NOT KNOW THE ANSWERS...RUN...DON'T WALK....RUN...TO
A LENDER WHO DOES!
1) What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the
10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in
completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)
2) What is the next Economic Report or event that could cause
interest rate movement? (A professional lender will have this at their fingertips. For an up-to-date
calendar of weekly economic reports, click here.)
3) When Bernanke (formerly Greenspan) and the Fed "change
rates", what impact does this have on mortgage interest rates? (the answer may surprise you. When the Fed makes a move they can change a rate called
the "Fed Funds Rate" or "Discount Rate". These are both very short-term rates that impact credit cards, Home Equity credit
lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction
as the Fed change. This is due to the dynamics within
the financial markets in response to inflation. For
more information and explanation, just give us a call.)
Be smart... Ask questions... Get answers!
More than likely, this is one of the largest and most important financial
transactions you will ever make. You might do this
only four or five times in your entire life, but we do this every single day. It's your home and your future. It's our profession
and our passion. We're ready to work for your best interest.
