Securing Accurate Interest Rates
Mastering the Art of Verifying Loan Terms
Did you know that your interest rate and your loan costs are directly correlated? Imagine a see-saw in a childhood playground with interest rates being on one side and loan costs on the other side. As one goes up, the other goes down and vice versa. So once you've gotten your itnerest rate, make sure to ask the following questions to confirm its accuracy and legitimacy.
The lower the term, the lower the interest rate and you want to make sure the interest rate you are quoted matches your desired loan term as no one wants a 10 year rate quote when they are seeking a 30 year loan.
ARM's are great as the interest rates are lower initially whereas Fixed interest rates are constant and do not change. Both are great, just make sure you are being quoted for the loan you want.
So you think you are being quoted a low interest rate, when come to find out, you are paying for it in advanced in the form of Lender Fees such as:
- Origination Fees
- Underwriting Fees
- Processing Fees
- Application and/or Admin Fees
- Interest Rate Lock Fees
The lower the rate lock period the better the rate and last thing you want to do is move forward on a 15-day rate lock when you're closing in 45 days. Why? You will have to extend your interest rate and that gets very expensive, very fast.
Want to know your interest rate without providing personal documentation or incurring multiple credit inquiries?
No problem, simply follow the script below the next time you're talking to a mortgage lender.
Hello, my name is ______ (insert your name) and I would like to know what Interest Rate(s) and with what Total Lender Costs you offer to someone who is buying a home...
- To live in or an investment property (choose 1)
- For a 30, 20, 15 or year fixed Interest Rate (choose 1)
- With a ______ Credit Score (insert your Credit Score)
- With a Purchase Price of $______ and ___% Down Payment (insert Purchase Price and Down Payment amounts)
- How long is this lock period for? 30, 45, 60 days?
