If It Sounds Too Good to Be True…Run, Don’t Walk
Even with all the regulations that have been placed on the mortgage industry, I am still amazed at the lack of ethics with Loan Officers quoting interest rates to “rate shoppers”. Now, I am all for trying to get the best deal, but unfortunately what happens to rate shoppers is they don’t get the best deal and don’t realize it until interest rates have gone up (which in some cases is within hours of the initial quote) or worse yet, they get down to closing and are told they need to bring in thousands of dollars more than they had expected.
Far too often we receive phone calls from borrowers who think they have all the answers that any Loan Officer needs to quote an interest rate, because they have shopped around, they know what questions will be asked. They are quoted an interest rate and how much it will cost. The only problem is the rate they were quoted is only for a 10 day lock, and the loan can’t close in 10 days. Or worse yet, quoted an interest rate that really doesn’t exist for the price (origination fee, discount points). Why, because the Loan Officer want’s the deal and hopes that rates are volitile enough to drop to the rate and price quoted before the loan closes.
So if it sounds to good to be true, it probably is. We all get our rates from the same place, the “secondary market”. Yes, some lenders will pad the price more that others, but unless the lender is trying to fill a commitment, rarely will you see the price lower for a given interest rate.
What borrower’s should be shopping for is experience and service. By experience, I mean experience of the Loan Officer. How much experience? Do they educate themselves on the ever changing underwriting guidelines? Are they licensed through the NMLS? Do they ask questions to find out what your financial goals are? If any of the answers are NO, then run, don’t walk to and experienced Loan Officer.