Sunday, April 22, 2007

Myth #4 – You can get the advertised rates from any lender

This is a myth. First, rates can change on a daily basis depending on what is happening in the economy: job forecasts, Treasury Bill auctions, or an increase in the inventory of major appliances. Second, the rate a lender quotes is for the best credit risk, and that may not be you. See Myth # 3 for more on this.

Third, if you are dealing with a lender on the Internet, or a lender that does heavy advertising, there is little investment in satisfying you. With all the leads they have coming in from their marketing they can disappoint many people and stay in business. They can quote one rate to get you in the door, and change it at the last minute when it’s too late for you to go anywhere else. I have seen this happen to many people I know. I try to warn them to work with an individual who they have been referred to and that can be trusted. But some folks just go for the low rate and end up with the bait and switch.

I have used the same mortgage broker for six or more years now. When he gives me a rate, it is based on my credit score and it’s competitive with any lender out there. He has all of my documentation, properties owned, assets, liabilities and more. All he has to do is update the file from the last submission, AND, the big plus for me, he handles the application process. I do not have to fill out any forms; he fills them out for me. I review them, make changes if needed, and sign them.

The last time I thought about going to another lender it took me three hours to complete the application and copy the documents that the lender requested. Between purchases and refinances I do 2-3 loans per year and spending three hours on a pile of forms is not my idea of fun. This mortgage broker is like a member of my real estate team, just like my roofer, plumber or architect.

When it comes to advertised rates, you have to get a rate based on your credit score and lock in the rate if you think they may rise before you are ready to close the sale. If you want to know if you have a good lender, there are questions to ask, but start with a referral from someone you trust.

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