Predicting when mortgage rates will drop is not as important as locking your rate before they rise. Rates can change several times a day and within minutes. Loan officers armed with rate tracking technology monitoring rate movement can save you a bundle.
You only want a large bank to service your loan. Most brokers and bankers fund loans through large banks but I wouldn't recommend you have the bank itself originate your loan. In my opinion their loan origination usually costs more and their loan officers are less knowledgeable.
Banks are volume lenders. They lock rate, usually charge a non refundable fee and close without regard to saving you money because they don't monitor rates, they only quote them. A smaller loan company, broker or small banker are likely to pay for this technology and more willing to take the time to monitor rates thereby potentially saving you thousands of dollars.
Many agree that small business is the heartbeat of America. Therefore, before venturing on the Internet to contact the big banks mortgage division consider the thousands you can save by manipulating interest rate "dips". You'll also be helping build strong communities and provide jobs in your area by using small to medium businesses like brokers and small bankers.
Those who work in the industry set the example. Real estate agents more often than not recommend brokers and small bankers over large banks. Recommendations are not made to receive anything of value in return. Receiving kick backs or referral fees is a federal offense with stiff penalties so there is no expectation of kick backs or referral fees for using recommended service providers. They recommend brokers and small bankers because they get accountability and good service which reflects positively on them and provides you the highest level of service. Small business work twice as hard because their survival depends on it.
Big players like Bank of America and Chase employ people to solicit business from brokers by offering wholesales rates which are lower than what one would get from walking into a retail branch, calling or the Internet. Running a mortgage office with low costs normally determines if your loan fees will be less. Most small companies don't spend hundreds of millions of dollars placing their name on the side of sports stadiums. TV, radio and heavy Internet advertising also gets really expensive. Guess who pays for it?
How to Shop Mortgage Rates
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Great post thanks for sharing.Specilly the rate offer by the Big player never been deliver.once you pay their non refundable fee every thing change.
What a volatile week Nevin. I really do not know if I have seen anything like this in the last 18 years.
Great explanation for disparity in rate quotes. Most consumers have no idea how many times and how dramatically the rates can change in a single day. As usual you set the pace in explaining to the consumers the vagaries of the mortgage lending business. Jack
Sukhdev - That is true. This is why we do not collect an up front rate lock fee like most of the banks do.
Doug - It certainly is crazy!
Jack - Thank you sir! You do a great job up there in Washington too!
It's nice when other mortgage brokers chime in and agree with you!! Your points are well taken, banks don't monitor -- they just quote. Brilliant way to "sum" it up my friend.
Great informational post about banks vs brokers and rates! Hope all is well Nevin!
Hi Nevin: Mortgage information can be so confusing to consumers but your informational mortgage blogs are easy for anyone to understand.