What To Look For
Four simple questions your lender should be able to answer. If they can’t, run, don’t walk, to one who knows. Odds are you are dealing with an “order taker” who knows nothing about the business.
1. What are mortgage interest rates baised on?
The only correct answer is Mortgage Backed Securities or the Bond Market. NOT the 10 year treasury note. While the treasury sometimes moves the same direction as Bonds, it’s not unusual to see them move in opposite directions. DO NOT work with a lender who is watching the wrong indicators of mortgage rates.
2. What is the next Economic Report or event that will cause interest rate movement?
A professional lender will have this at their fingertips. Could be a Bond sale, Unemployment numbers report from the Feds, etc.
3. When the Fed’s change rates, what does it mean to mortgage rates?
Nothing. It is the rate the Fed. Govt. charges banks. It will impact credit cards, car loans, etc. Mortgage rates are determined by the financial markets, not the Federal Government.
4. What is happening in the market today? And what do you see in the near future? (OK, two questions in one)
If a lender cannot explain how Mortgage bonds and rates are moving at the present time, you are talking to someone who is not current with world events. Rates can change at any time and you need a lender who keeps on top of the market to get you the best rate at the best time.
Your mortgage will be one of the largest investments you will make in your life. You may only do it a few times in your life. I do this everyday. I’m ready to work for you.