I was posed with a not so unique question early on last Friday's morning. It came from a rather astute prospective client who asked, "How do I make sure I get the best rate?"
The more I thought about it after initially answering the question, the more I wondered what was really the right answer? Heck, was he looking for the cheapest deal or the best deal, they are not always one in the same? Was he looking for trust or smoke & mirrors? He's a quality borrower by lending standards, yet seems to have fallen into a similar box of shoppers who have made life difficult for themselves and us by shopping on fees and rate alone.
Devil's advocate may say, "Is this trying to substantiate ridiculous fees and a higher than market rate to pad your pocket book?"
Devil's nightmare says, "Not at all. Sales is volume driven, word of mouth, not getting ‘rich' off of one transaction, but making coin because you do many of them. And I believe if you do it right, there's an education/consultation factor that just may be priceless for those who chose to work with you. That kind of stuff saves them money, even though the Good Faith Estimate isn't the cheapest they've seen and the rate quoted is the lowest they've heard"
And he's still on that fence, which might make me a less than stellar sales guy. Which also puts me on par with most folks who tend to be less than stellar shoppers. My job, in part, is to consult folks on what to do and when to do it, in regards to anything involving Mortgage Financing.
If you are in the position to obtain financing to purchase a home and have the desire/need/want to do just that, get off that little picket fence. It may be electric when you look forward to see it behind you. What does that mean?
Rates will go up. I'm pretty sure of that. More than likely, sooner rather than later. The historical low we've seen has got to inevitably come to an end. The Tax Credit thing, well, it ends soon as well. And the inventory of homes on the market at prices more appealing than Selma Hayek in white stockings, will eventually reach a happy medium and go away. It will no longer be a Buyer's Market, at least like it is right now.
To answer the young man's question of how one can get the lowest interest rate possible, it's not always by shopping around. While that's a starting point, this isn't a flea market. This is probably one of the most important transactions that gentlemen will undertake.
In retrospect, I should of answered his question with a somewhat different retort. He is looking for the best rate and talking to me at 7:56 AM on a Friday Morning. I think he just found it.
...sorry everything after "Selma Hayek in white stockings " is a blur ....
Although I'm pretty sure rates will go up soon too ! ... So people, call Mr Sardi and lock in your rate now !!!!!!
jason - son, those that listen and hear what you say will benefit. the others will have to suffer for their own self chosen deafness..........
Better than sitting on an electric fence in a g string! Here's a pic to think about..!
Very nice call to actin Jason! - I need loans too! We all do!
Jason - the media has blasted news of 'crooked' mortgage brokers, illicit deals, etc for so long, that now it's hard for people to trust anyone - mortgage brokers, realtors, banks. And that's sad. Because of the actions of a few (in comparison to the total number of mortgage brokers) it seems as all of you will be painted with the same brush. And that's SO hard to take. I'd lose all patience with people ... and wind up unemployed.
Sheldon - That "blur" thing isn't always necessarily bad;)
JMac - As they say, "Time is the only teller."
Darin - Taking pictures of your backyard again, I see:) Sometimes folks need a kick in the butt to act, their best interests could be at stake.
Carol - The cynicism from past actions is still felt and probably will be for some time to come. For the most part, I get positive reactions to folks I talk with. Patience is a virtue I've learned to hone quite nicely on most occasions.
and if anybody needs a reminder of this just look at the Feds statement yesterday. They agreed to continue their purchase of securities (read: artificially keep rates low) until October to gradually "unwind" or pull out of it. Folks once we stop buying our own debt it WILL have to be priced by the market and rates WILL be going up. No need for a crystal ball on that one- that train is already lighting up the tracks.
Good one as always Sardi boy- hope your customer sees the light and realizes how lucky he is to be in your hands.
Gerry Suarez, Jr.
Your FHA Loan Pro!
Suarez - Great points, amigo. I hope folks are opening up their ears while the money is still cheap by any historical account.
Jason: Thanks! I appreciate it. I too agree with you rates will rise. I'm not sure that will happen to any great degree for the rest of this year but expect rates to be at least 1% higher within a year. That being said, our business is recovering, albeit slowly. I believe that even with rates higher things will continue to improve. The purchase market is not as susceptible to rates and it's improving as we speak. Take care.
Paul - Thank you. Things do seem to be a bit better, though the dust hasn't cleared just yet. And you are right about the purchase money market not being as susceptible to interest rates.
I liked the starement that the cheapest deal may not be the best deal...isn't that the truth?! The cheapest deal is often a false economy.
Right you are, Leslie.
Interesting timing as I was just having a philisophical debate with an old friend of mine which fits nicely into this post. There is never going to be the best rate or the bottom of the market and the soone our clients realize this the sooner they can jump off the fence and start enjoying life again. Yes, I will advise buyers that the market here is likely to go down further so if they aren't in a hurry then they may want to wait. But, for the guy in your office who is clearly ready to buy in the next 45 days, the time is now and they need to work with someone they trust, like you, who will ensure they get a fair deal and who will represent them honestly.
Jason,
Anyone not locking in now is a fool. We are going to get hit with inflation.
Hi Jason...what I admire about you is ..what you see is what you get...no pretense..no telling you what you want to hear..
instead ..honest, up front professional service. How can anyone ask for anything more. The best rate is town is not always the best way to go. I want my clients working with some one that is honest and trust worthy..Nice job Jason