You know the most interesting question I always get when working with the new customer is “What’s your rate?” It’s a legitimate question but one that’s not as simple or easy as customers expect it to be to answer. The reason is that over the last few years in the name of consumer protection, the industry moved to a pricing model that now considers multiple factors when setting your interest rate. It’s difficult if not impossible to know in a preliminary call with someone seeking a new mortgage how each of these factors impact the interest-rate. Before the real estate and housing market crash of 2007 mortgage pricing was simple. Fannie Mae & Freddie Mac set a base rate in the marketplace and that was that. You might have to pay a little extra if you wanted to pay your own property tax bill or if your lender was higher cost. Today several factors impact your end rate on your loan. Your credit score, loan-to-value ratios, the size of the mortgage you plan to take out can all impact your rate by as little as .125% or as much as .500 by the time everything is factored in.
My friend and mentor in the business, Ron Quintero, told me this back in the day. At the time we were calling on For Sale By Owner sellers and potential buyers. He well knew, that we had about 15 minutes to get back to people when they were attracted by our marketing. If we didn’t, they were lost. Money and time out the window because our marketing worked, but we were not ready to sell!