A lot of buyers that I work with want to know, how can I get the best interest rate? A lot of times they might look at me for that, because I had five and a half years in mortgage banking and as a mortgage broker. There are quite a few ways that people go about doing it, I do not really think all of them are good and I think some are certainly better than others, so please take what I say with a grain of salt and make your own decisions.
The first thing a lot of people do is they tend to go to the newspaper and look up the interest rates there. I do not like that idea; the main reason is because the interest rates are usually collected on either Wednesday or Thursday with it coming out on Sunday. Well they are already old, so it leaves a lot of baiting and switching going on in the newspapers for the companies who put the rates in there.
The second way is a lot of people will go to online companies like Lending Tree. The problem with Lending Tree is they are really not getting people bidding for your interest rate unlike they say on the television commercials. What they do is they basically sell your lead, the information you give them, to three different companies and possibly even more than three. The problem is you really do not know anything about these people and they could be in business for a matter days, a matter of weeks, or they could usually be a legitimate organization, though a lot of the legitimate ones they do not need to go to Lending Tree and of the like.
What I would do and my recommendation is this: Take three companies, maybe your real estate agent might know of a lender, you might have a local bank, and maybe someone else, maybe it is a credit union or something like that. Of course, I am not a real big advocate for credit unions. I personally would stick to either a mortgage banker or a mortgage broker, though some banks like Wells Fargo are good.
What you will do is you will talk to them and you want to make sure they are comparing apples and apples. So make sure that all of them know when you are going to close, just tell them to assume you are going to be closing on the fifteenth of the month and let them know you want a thirty day lock, etc. Because, there are a lot of ways that they could manipulate the information they give you, they could put your home owner’s insurance extremely low and put your closing at the end of the month and just estimate everything real low on there based off of certain parameters. So what you want to do is you want to go to them, give them the information and really feel who you have the best comfort level with, who you like the best. Once you find out who you like the best then take the other two quotes. If the one you like the best is the lowest, great, use them. If one of the other ones is lower, then go to the person who you have the comfort level with, give them the good faith estimate and ask them if they can meet or beat it. A lot of them will say, hey we can, or this is what they are doing, this is why theirs is a little bit lower, etc. Then that way you are going to be able to work with someone who you really like and trust and you will have the lowest interest rates. There are some situations, it is pretty rare that they would not be able to meet or beat it. I always told people when I was in mortgage banking that I will meet or beat their rate out there and if I can’t beat their rate I will give you $50, but it has to be from a legitimate company, it can’t be from XYZ Mortgage Shack. So if you follow these guidelines and what to do, I think you will be looking really good and I think you will be really happy at the end.
Another word of advice I will give you, is to make sure everything is in writing, everything you get, what the interest rate is, when that lock expires for the interest rate, get it all in writing. I hope this helps you and I hope you have a great day.
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