You’re a pretty savvy self-educator. You dedicate a little time to read up on a topic and ask questions from people in the know so you can make an informed purchase or weigh the pros and cons of a big decision. Now you decide that home ownership is worth investigating and suddenly there’s a problem… not everybody seems to agree on what’s what.
Not all mortgage companies post their interest rates on their websites, and those that do often ask for some pretty personal information before providing anything in return. And what is the most important thing to focus on when choosing your mortgage company? The rate, the monthly payment, how fast a company says they can deliver an approval, how well they communicate, the number of references… something else?
Discussing Mortgage Rates
Let’s start with the big question: Why all the secrecy around rates? Here’s the surprise: It isn’t secrecy at all. Starting with “what’s your rate?” is like asking what the weather is today in the United States. Not such an easy question to answer unless you have more specific information, is it?
Mortgage rates fluctuate with the markets throughout the day, so even within a day you may see a different rate depending on what’s going on in the markets when you check. Your credit score plays a role as well. If you have a strong credit history showing that you pay your bills on time and repay your loans, you stand to see slightly better rate options than someone who defaults on their debt obligations.
Looking at What’s Important
Sure, rates are easy to line up in a row and spot the lowest, but there are other factors that affect your payment and loan terms. It sounds farfetched, but the lowest rate doesn’t always add up to the lowest monthly payment. There are different kinds of mortgages, each structured for different circumstances. The amount of your down payment and other factors, such as the location of your property, could affect which loan products are available for you to consider and how much comes out of your pocket.
What is most important to you? Think about how quickly you want to repay your debt, how much you want to pay per month and how much money you’re willing to put forward as down payment. Timing is an often overlooked factor that turns out to be critically important in a home purchase transaction as well.
Are you starting to see why mortgage companies want to start a meaningful conversation with you before talking about options? They could toss numbers at you all day long, but without taking a good look at your specific situation, that wouldn’t do you any favors.
You’ve got this, savvy self-educator. Loan Officers are there to help you find the best fit for your exact situation so bring your questions. Share what is most important to you and what fears you might have. Find out how your mortgage company will keep you and the other parties in the home purchase updated. Getting a mortgage is a big decision, but it doesn’t have to be a scary one.