It’s an important element of your mortgage, we all know it. But if it is the only way you determine who your mortgage lender will be, you may never end up at the closing table at all.
A couple of things conspire against you if you are only interested in the lowest rate. The first one is that you may not be qualified for it. Period. A short list of why you might not get the lowest available rate in the first place include but is not limited to:
Just the quick list off the top of my head:
– You don’t have a 740 credit score. You automatically take a hit.
– You aren’t buying a single family home. Condos and townhouses take a hit.
– You aren’t borrowing over $300,000. Most lenders give their best price to big loans.
– You need to close in 21 days and you need us to rush you to closing.
– You need to close in 60 days and you want to lock the rate today.
Even more important when you are buying a house is the number one question you should ask and only ask it after you have gone through the pre approval process including the submission of andy and all needed documents for the loan you are trying to get. “Can you get me approved and to closing on time for the loan I need to buy this home”? Because no matter what rate someone tells you they have on the phone, if you don’t get to the closing table on time, the low rate you were promised comes with a much higher price.
Most lenders who compete on price only, have to cut corners somewhere and it’s usually in the processing and underwriting of your loan. Things you don’t see until you are too far along in the mortgage process. Better to get a fair deal from a lender that can guarantee your closing. The piece of mind is worth .125% or .25% on your rate and roughly $30 bucks a month on a $250,000 loan.
