Here's the inside scoop on how to do it right.
The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly. Here are four simple questions to ask your lender in order to make sure he or she is experienced enough to guide you through the loan process.
1. What are mortgage interest rates based on? The only correct answer is Mortgage Backed Securities or Mortgage Bonds, not the Fed or the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. Do not work with a lender who has their eyes on the wrong indicators.
2. What is the next Economic Report or event that could cause interest rate movement?
A professional lender will have this at their fingertips. Contact me to receive an up-to-date calendar of economic reports and events that may cause rates to fluctuate.
3. When the Fed "changes rates", what does this mean... and what impact does this have on mortgage interest rates? The answer may surprise you. When the Fed makes a move, they are changing a very short-term rate that impacts credit cards and lines of credit... but NOT fixed-rate mortgages. For more details, see my article called: How the Fed Impacts Mortgage Rates.
4. What is happening in the market today and what do you see in the near future? If a lender cannot explain and show you a picture of what's happening with mortgage bonds and interest rates, you are probably talking with someone who is not experienced enough to handle one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life, but I do this every single day. Contact me for more details or to schedule a conversation!
Source: CMPS Institute