Make sure you are working with an experienced, professional loan officer. One of the largest financial transactions of your life is far too important to place into the hands of someone who is not capable of advising you properly, and troubleshooting the issues that may arise along the way.
- Make sure you are working with a mortgage professional who tracks interest rates on the right index. Which index? The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT 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. Run…DON’T WALK...Run to a lender that does.
- Make sure you work with someone who knows what the next Economic Report or event is that could cause interest rate movement. A professional lender will have this at their fingertips. Call for an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate. Or, let me know if you want to be added to my email distribution list for weekly updates of this current information.
- Make sure you work with someone who knows when Bernanke and the Fed “change rates” and what this means about what impact it has on mortgage interest rates. The answer may surprise you. When the Fed makes a move, they can change a rate called the “Fed Funds Rate,” or “Discount Rate.” These are both very short-term rates that impact credit cards, Home Equity credit lines, auto loans, and the like. On the day of the Fed move, mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give me a call.
- Make sure you work with a professional who has access to live, real time, mortgage bond quotes. If a lender cannot explain how Mortgage Bonds and interest rates are moving, in real time, and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional you would entrust your home mortgage financing. Would you work with a stockbroker who only grabs yesterday’s paper to tell you how a stock traded, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!