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Shopping Around?
HERE’S THE INSIDE
SCOOP ON HOW TO DO IT RIGHT!
First: make sure you are
working with an experienced, professional mortgage consultant. 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 FOUR
SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF
THEY DO NOT KNOW THE ANSWERS… RUN… DON’T WALK… RUN… TO A LENDER THAT
DOES!
- 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.
- What
is the next Economic Report or event that could cause interest rate
movement?
A professional lender will have this at their fingertips. Call me for
an up-to-date calendar of weekly economic reports and events that may cause
rates to fluctuate.
- When
Greenspan and the Fed “change rates”, what does this mean… and what
impact does this have on mortgage interest rates?
The answer may surprise you. When the Fed makes a move, they are
changing a rate called the “Fed Funds Rate”. This is a very
short-term rate that impacts credit cards, credit lines, auto loans and the
like. Mortgage rates most often will actually move in the opposite
direction as the Fed change, due to the dynamics within the financial
markets. For more information and explanation, just give me a call.
- What
is happening in the market today and what do you see in the near future?
If a lender cannot explain how Mortgage Bonds and interest rates are moving
at the present time, as well as what is coming up in the near future, you
are talking with someone who is still reading last week’s newspaper, and
probably not a professional with whom to entrust your home mortgage
financing.
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