It is always a challenge for homebuyers to select a suitable loan program that comes with a great interest rate. Make sure to work with an experienced mortgage loan professional at an established and reputable company. Ask other trusted professionals like your accountant, attorney or financial advisor for a referral. Remember, you will be relying on your mortgage banker to explain loan options and recommend a loan plan that you will likely live with for many years. You need to be able to discuss your long-term goals and the details of your personal finances in an atmosphere of trust. Remember, the best loan is not necessarily the one with the lowest interest rate. A lender might offer you a very attractive note rate, but additional fees can push the total Annual Percentage Rate up significantly. The best-case scenario is to find a loan that combines a low note rate and low (and adequately disclosed) closing fees.
In today’s sophisticated marketplace it is not uncommon for a prospective buyer to shop around for a mortgage loan. In fact, with so many companies and options available, it is important to shop for the best overall fit. Always begin by making sure you are working with an experienced, professional mortgage officer. The purchase of a home, one of life’s largest financial transactions, is far too important to place in the hands of someone unfamiliar with the many nuances of modern day lending. Here are a couple of simple questions an experienced lender will be sure to know. What are interest rates based on? Many inexperienced mortgage officers will tell you the 30 or 10 year Treasury note. The correct answer is Mortgage Bonds or Mortgage Backed Securities. Another question is what effect does the ‘Fed Rate’ have on mortgage rates? Though surprising to the general public, any seasoned mortgage officer will know that mortgage rates, on a short term basis, will often move in the opposite direction of the fed rate change.