Common misconception is that the Fed sets mortgage rate. While Fed policies have an impact on mortgage rates overall, they are not able to control the daily changes. The Fed can affect mortgage rates every day, even though it may not adjust rates for months or years.
You should work with a lender that tracks Mortgage-backed Securities (MBS), so they can help determine when it is time for you to lock the rate. The right advice on when to lock rates can help you save thousands.
How long does the Lock period last?
Ask the broker for the lock duration when you get a rate quote. It is important that you allow enough time for your purchase transaction to be completed during the lock period. Ask for an extension policy. What happens if your lock expires, but you haven’t yet closed the loan? What are the lock extension charges? Who pays them?
Do you know the factors that influence mortgage rates?
It is crucial to work with a Loan Officer who understands how mortgage rates can impact your daily life and what they can do to change it. You already know this because you have read the guide. You can check that the loan officer has the correct answer by comparing this guide with the answer.
Your thoughts on the best time to lock your vehicle?
Ask your loan officer if they are able to track the MBS live. A 12 basis point change can make a big difference in the rate that you are eligible for. MBS may not be available for loan officers to monitor live. This will allow them to provide you with the best advice possible to lock the rate.
What percent of the estimated fees might increase at closing?
The loan officer will provide a Good Faith Estimate (GFE) that includes details about closing costs. This estimate is only an estimate, and it may be changed at closing. Ask the loan officer for details about each item on the GFE and whether they can be increased at closing. It is important that you understand the reasons and how they might increase. It can sometimes be difficult to choose the best option.
Compare Mortgage Rates
The Annual Percentage Ratio (APR), was created to make it easier to compare rates. Different lenders calculate APR in different ways. This is how you shop rates, so it’s easy for you to compare rates.
Tip 1 – Don’t compare rates. Compare fees too. Many borrowers make a simple mistake by calling different lenders to compare rates. They don’t ask about the fees. Lenders who charge significantly more than someone with a lower interest rate could be charged higher fees.
Tip 2 – Ask all lenders for the same closing costs. Request rates with a $2000 minimum closing cost. If you are looking for low-cost refinance, ask for free quotes. You can compare rates by doing this.
Tip #3: Get mortgage rates in a very short time, usually within an hour. Mortgage rates change frequently. Multiple lenders are recommended if the Mortgage-backed Securities, (MBS), trades at the exact same level. If you don’t, apples won’t be apples. Lender A might shop on Monday, while Lender B shops on Tuesday.
Tip #4: Choose the with the lowest rate. The best mortgage lenders may seem shocking but it is the truth. This is my top advice.
Bait-and-switch technique
Lenders will attempt to get you into a low-rate loan agreement, and then modify the terms as you proceed with the loan process.
Accessibility
Find a lender that works after 5 p.m. Monday-Friday. This is especially important for first-time buyers.
Check the credibility and competence of the lender
Think about the credibility and expertise that the mortgage lender has. To find out if they have been featured in the media, you can Google them. You can also check their Google reviews and review client reviews. You can consult a knowledgeable consultant to help you select the right loan program for your needs.
