As you might know, I work with my husband, Steve. Occasionally, I sit in his office waiting to talk to him – while he’s on the phone with a customer. Today, I listened as he explained where mortgage interest rates are, and what the best interest rate was for the customer on the other end.
Have you ever bought tires? Well, you know how when you are looking for tires there’s all these ads that say that tires are $25 each? When you get in the tire shop, and the guy starts adding for valve stems, alignment, balancing… rebuilding tire pressure sensors and pretty soon the tires for YOUR car are $45 a piece.
Well, that’s kinda’ how I look at mortgage rates today. In general, rates are around 4.25%. You can get lower with a little more cost – or you can get a little higher rate with fewer costs.”
I thought that was pretty clever! It made me wonder though, how low COULD I really get a mortgage loan? Let’s say the seller is willing to pay closing costs, and I can pay a 1% origination fee and .25% in a discount fee. If that was the case – what could I do??
On a conventional loan you could get a 30 year fixed rate today at 3.875% (with great credit and a 20% equity gap an APR of 4.064 refinance or purchase)
A 15 year mortgage interest rate is even lower!
On a Government loan (FHA or VA) you could get a 4.0% mortgage loan (4.562 APR) 30 year fixed rate!
If you get that 3.875% rate – does that mean you are getting the lowest possible rate? Someone said, getting the best mortgage rate takes research and LUCK. I believe that’s true. Mortgage interest rates don’t just change daily – they change by the HOUR, sometimes 2 or 3 times within 30 minutes! You could research rates right now, and call back in the morning – and find a difference of an 1/8th or more!
The real purpose in researching all of this is (especially if you are shopping for a refinance) finding a loan officer that has YOUR best interest at heart. You want to work with someone who is going to ask you important questions, like:
- How long do you expect to live in your home?
- Do you have a second mortgage or an equity line on the home?
- What are the financial changes your family is going to experience in the next 3 – 5 years? (do you have children going to college, someone getting married, expect to have new children in your family/)
- What is your debt and spending situation? Have you been saving for retirement?
Besides the best mortgage interest rate, you are looking for a realistic idea of what it will cost to refinance your mortgage loan. If one person quotes you title insurance of $300 and another quotes title insurance of $378… well ask the $378 guy why his is higher. Chances are, he’s given you an EXACT number, and the $300 guy gave you a “guestimate” on the cost to refinance your mortgage loan. If one person quoted you $700 for hazard insurance and you know yours is $633 a year, tell them!
The insurance, title, recording, attorney, taxes appraisal, credit fees are generally NOT fees a loan officer has ANY control over.
The bottom line here is this… work with the loan officer that has your best interest in mind. If one person charges you $700 in fees and saves you $115 a month in your mortgage payment when you are refinancing your mortgage loan, I’d be happy!
BUT… if the loan officer asks the RIGHT QUESTIONS, and saves you $280,000 with a refinance on your mortgage loan by giving you a shorter term, or pays off consumer debt… THAT’s something to stand up and dance for, do a Whoot! Whoot! and tell your friends about!
If you are considering a REFINANCE, or the purchase of a home – call Steve and Eleanor Thorne, 919-649-5058 we have the best mortgage interest rates and the lowest fees available! If rates were at ZERO, would that make you want to buy?
I try and answer all questions :)