In the process of getting a mortgage and being quoted a rate that seems out of line? It just might be—here’s why.
As interest rates go higher, refinance transactions have gone down considerably. For some direct lenders, refinances account for the bulk of their business. As business falls dramatically, many lenders attempt to compensate for the loss of revenues by increasing the margins on the products they offer—meaning they raise rates to make more money due to significantly less volume. This practice has caused some pretty dramatic differences in rates and fees from one mortgage company to another and it really is important to shop around for the best deal. With this dynamic rippling through the lending markets, it really pays to get a second, third or even a fourth opinion. Obtain a few quotes, then give us a call to compare. You may find the differences rather significant.
Here’s a unique and superior way to look at and gauge one lender vs. another:
We all have the same rates! Yep, you read that right. The bank, local direct lender and the mortgage broker—all the same. It’s the cost or credit for each rate offered that will differ—by a little, or by a great deal. When obtaining a quote, ask for the total cost—points and lender fees—or lender credit for various interest rates. The higher the rate, the less the cost will be. Third party costs—title, escrow, appraisal typically have nothing to do with the lender (unless an affiliated business relationship exists) and typically are not part of the comparison. Checking the Freddie Mac weekly mortgage rate survey is a great starting point.
There you have it. If you are in the process of obtaining a mortgage in the Santa Rosa area and are being offered a rate that seems way too high, it just may be. Do yourself a favor and get another opinion. Call us @ (707) 579-5411 for an honest quote.