One of the most frequent complaints we hear from borrowers is about the interest rate “they thought” they could or would get on their new mortgage loan. This happens more so when borrowers found their mortgage consultant by either (1) calling several lender offices inquiring about mortgage rates, or (2) relying on Internet rates.
If they spoke to 7 loan officers, they flat out chose the one who “claimed” to have the lowest rate, OR the lowest rate AND the lowest estimated closing costs. And many borrowers do not hear or see that important caveat of “estimated.”
Quickly quoting mortgage rates to borrowers over the phone can open an avalanche of problems. This is more true now than ever because there are so many ifs, ands, and “buts” to mortgage pricing. If a loan officer skims over just one of these “ifs”, the borrower might no longer qualify for that quoted rate. Happens a lot. Highly possible that a loan officer new on the job can miss something.
Not only that, numbers tossed about over the phone might be just that: numbers tossed about. If you happen upon someone unethical who just wants to reel you into a transaction by lowballing everybody else, then that’s what he/she will do. This happens in every business, not just mortgages. Consumers are frequently given bad quotes – intentionally. Consumers are more likely to be intentionally misled when they come across as solely “price” focused. Combine this type customer with a greedy, unethical employee, and you have a huge potential for problems down the road. The customer will not win in the end.
The mere act of trying to shop for just “price” on a mortgage is torture. If borrowers do want to indulge in price-shopping, it needs to be done within a one day period of time – between 11:00 am and 3:00 pm EST. Before 11:00am, you might get yesterday’s rates. That’s no good.
Most borrowers do not have the patience or will to diligently shop for price in this manner. But anything else has no value. If you want to at least “attempt” to price shop, then you must contact all the lenders within the same period of time. Comparing what Lender A said on Monday to what Lender B said on Thursday is useless information. Not a comparison at all. Since October 2008, mortgage interest rates have changed as often as 5 times in one day.
And here’s what I haven’t mentioned. Let’s say a borrower gets quotes (real or not) on Monday. Well, those rates were for Monday. But the borrower wants to think about it and calls back in 2 weeks. Now, rates will be re-quoted for the current day. Whatever the borrower heard 2 weeks ago is a moot point.
I will end this post with my usual commentary. Borrowers, your mortgage is far too important and complicated to have anyone but a true professional help you. I encourage you to find a pro. There are lots of us out there.
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