It seems like every week I get a call from someone wanting to know just the interest rate. We’re completely fine with quoting interest rates. You won’t get smoke and mirrors from us. However, it doesn’t work that way.
While I’m happy to give you a rate quote, I absolutely positively need to know a few things about you before I can say something and put my reputation on the line. I need to know things such as wheter you’re self employed or if you’ve had a bankruptcy in the past two year or if you’re a first time home buyer etc.. Believe it or not these things can significantly affect the interest rate on your loan.
Many people seem to interpret my questioning as a stalling technique or some kind of snake oil sales method. It isn’t. If you don’t believe me let me show what seasoned real estate agent Vicki Moore has to say:
People ask me all the time, “What are rates?’’ I have a standard answer, “That depends.” But they don’t want to hear that. They want to hear “6.5.” It doesn’t work that way.
When you see E-Loan, Ditech, LendingTree or whoever offering a 30 year fixed for a low 6.5%, that doesn’t mean for you. That means for the guy that meets the criteria. If you don’t fit the criteria, you don’t get that interest rate. But it gets people to call. It’s called a teaser.
They need to know what your income is and what your debts are. Child support? Alimony? Taxes owed? Credit score? Do you have car payments? How many are left? How long do you expect to own the property? How much money will you put down? Is the monthly payment an issue? Or are you flexible on that? Are you okay with a pre-payment penalty (a fee charged if you change loans before a specified time period)? Buying with a second person? Do they have child support or alimony payments? Taxes owed? What’s their credit score? You get the idea.
Vickie is an agent in San Mateo, California. I didn’t pay her to write this. I’ve never done business with her, and I’ve never even talked to her. However, she hits the nail on the head. A lender needs to know YOU before they can quote a rate.
I would never trust a lender that spits a number without taking the time to understand your situation and evaluating your financial position. It’s not a selling or stalling techniques, it’s just a professional doing their job well so your interests are served!
Welcome to the Arizona Mortgage Guru blog, a great resource for all your home financing needs. If you're new here and like the content, you can subscribe to my RSS feed to get regular updates on all things related to mortgages. Thanks for visiting.
Is Your Subprime Mortgage Interest Rate Frozen? Here Are Five Things You Must Do NOW!
Honey, Interest Rates Shrunk the Loan
Update on Inflation and Interest Rate
Related posts brought to you by Yet Another Related Posts Plugin.
on Nov 30th, 2007 at 6:38 pm
Hi Shailesh,
Nice post. Luckily, most people want a solid relationship with the professionals that they deal with. Unfortunately, some don’t.
I was at your class today. You did an outstanding job. I was sitting in the front row. Sorry I was late. Rain.
I look forward to reading more of your blog.
Pat
on Dec 1st, 2007 at 1:48 pm
Pat,
No problem that you were late. I’m glad you came and enjoyed the material and for you reading the blog.
We are certainly in the relationship business and that is always key.
on Dec 5th, 2007 at 9:14 am
Shailesh:
Nice blog full of useful information. Question: We are getting a beach home built and are looking to close in March 2008. Where do you see interest rates going over the next few months? I am trying to decide if I lock in now at 6.25 or wait till they drop further.
GL