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What's the best way to "shop" for mortgage rates?

  • January 10 2013 - US
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Answers (9)

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"I only have one lending source, I'm not a broker." -

Ah!  That explains it!  When working for a specific lender, they are not going to cut off your source, nor change any volume discounts...

But I still say, shop the loan officer, not the rates... and include both bankers and brokers in your comparisons.

Let the loan officer shop the rate and terms and figure out the best time to lock.  Yes, the banker may have less product line to choose from, but they typically are still priced competitively.

But I'm glad to know that if I see a sudden drop in rates, and I want to lock immediately without having sent in any paperwork, that you would be able to do that.
  • January 10 2013
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The LLPA adjustments for score, purpose and LTV are a matter of public record right on the Fannie Mae web site; if a client wants to question the adjustment I just point them in that direction.

The lock period is sufficient to close the loan; any lender would know how long they need and it would be criminal to lock for a period shorter than that.  If we run over we just extend the lock with no extra charge to the client. (which some can argue means we just spread it around, but it is what it is).

I only have one lending source, I'm not a broker.

  • January 10 2013
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"...and the appropriate LLPA adjustment can be made at that time." -

which is where the bate-and switchers come in from the unscrupulous loan officers, which is why I still say it is more important to shop the loan officers than the rates.

 I'm assuming you make similar adjustments if the middle FICO score is not in the stated range.

And of course, how long it takes to get through underwriting does affect what lock period is selected, and the longer the lock period, the higher the rate.  Some may quote for a 15 day lock knowing full well that they won't get through underwriting in that time span.  But it would depend on how easy (or complex) it is to verify the income.

So you regularly lock loans for people that can't be approved?  Your lending sources don't care that they locked loans for people that won't take them?
  • January 10 2013
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Income, though relevant to getting approved, isn't relevant to a rate lock.

The loan to value can be locked to what they say it is, if it changes when the appraisal comes in the change is an allowable changed circumstance and the appropriate LLPA adjustment can be made at that time.

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How can you lock a rate  and terms without knowing the loan to value ratio, nor their outstanding debt, nor their verifiable income?  Your lending sources just take your word for it regardless of underwriting?

Or do you break a lot of those locks when you find out the LTV was not as assumed?  Doesn't that increase the rates for your other customers?  Or do you just adjust the loan amount to comply with the assumed LTV?
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and since you can't lock before the application is in and your appraisal completed,
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????????????

Whether or not the appraisal is in has no bearing on the ability to lock. 

As a matter of expediency (such as they call me at the end of the day when I'm ready to go home) I've even locked people before they sent in an application.
  • January 10 2013
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Not sure about "best" as it is a matter of opinion but I would recommend calling a couple of local mortgage company's and get pre-approved and shop around.  
Best of luck.
Spirit
  • January 10 2013
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Though you can get free quotes on ZMM place (link at top of page for mortgage rates) easily for a starting point, you would have no clue whether they will fund your loan on time, and since you can't lock before the application is in and your appraisal completed, you will have no clue what the rates and terms will be at the time you are able to lock.

You are better off screening the loan officers ahead of time.  Read their contributions on Zillow to see if they are skilled and knowledgeable and have their client's interests in mind or something else.

The thread:
rates on the move again  will give you a good clue of what is happening in the economy and how it is affecting rates that are offered.

You should not be shopping rates, but rather loan officers.  Let the loan officer shop the rates for you instead.  They typically are watching multiple sources regularly.   They get the rate sheets from many lending sources multiple times a day.

By the way, only the "confirmed lenders" (loan officers) on Zillow will provide the ZMM "robo-quotes".  There are many loan officers ("lenders") on Zillow that contribute frequently that may be better choices, but they have chosen not to do the robo-quoting.  Screen both.

And if you do get robo-quotes that you like, you can always ask  on the forum if they are reasonable and really available.  And you can always ask your selected loan officer if what was quoted can be matched.
  • January 10 2013
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First, ask friends and family that you trust, who they have used. When I bought my first home, my first step was to go on Facebook and just ask who my friends had used. Many answers came up, and I called every single one of them. 

There are also sites like lendingtree.com that will give you a list of companies, but I prefer someone I can sit down in front of. The reason for this is that "shopping" for rates is good once you know the type of mortgage you need. A GREAT mortgage specialist will look at your overall financial plan, and determine what the right type of loan is right for you.

Realtors can be a good source of information too!
 
  • January 10 2013
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