Are You Searching for Mortgage Rates In All the Wrong Places?
Are You Searching for Mortgage Rates In All the Wrong Places?
Imagine you want to go visit your relatives over the holidays. You’d like to find out what flights are available and how much they will cost, so you go online, fill out a long form with details of the trip you want to take…and wait for travel agents to call you to make their best offer for your itinerary.
These days that sounds absurd, doesn’t it?
Unfortunately, that’s how online searches for mortgages have worked, until now. Even the most popular mortgage sites generally make you fill out a form with lots of personal information, only to have it sold to several lenders who then call you to pitch their best deals. If they do quote a rate, read the fine print: it’s likely a rate based on a typical scenario, not your specific request and qualifications.
To be fair, quoting a rate for a mortgage is no easy matter. One lender alone can have ten pages of pricing guidelines (in 8 point typeface!) to wade through in order to figure out which loan the consumer qualifies for, and what the rate will be. Even the most savvy loan officers can have a difficult time sorting through available rates and programs with multiple lenders. Fortunately, the technology that top loan officers use to find the best loans for their clients has now been made available to consumers, for the first time.
The next time you are searching for loan online, ask these questions:
1. Does the site require me to provide a lot of personal information just to get a rate? Do I know who will ultimately have access to that information? Shopping anonymously means you won’t be pressured with sales calls until you have found a loan you like and are ready to apply. 2. Does the site provide a rate based on my specific loan request, regardless of what type of credit I have? Average rates or rates based on a general scenario are worthless if they do not apply to your loan request. The rate you are shown should apply to your situation. 3. Is the rate I am shown a “par rate?” Par rates are the rates lenders charge brokers without hidden markups. These hidden markups, called “Yield Spread Premiums” or “YSPs” in the industry, have been criticized for adding anywhere from $300 to $3000 or more to mortgage loan costs. 4. Does the site provide unbiased mortgage education information? A mortgage in most cases will be the largest financial transaction in your lifetime. A few hours spent making sure you understand your options and get the best deal will be well worth it.
Getting a mortgage rate quote is now becoming as easy as getting online quotes for everything from auto insurance (Progressive) to home prices (Zillow) at a new consumer site, FreeRateSearch.com. Make sure you know what you’re getting when you start looking for mortgage rates.
About the Author
Gerri Detweiler is a consumer educator, author of three books including Invest In Yourself: Six Secrets to a Rich Life, and education director for FreeRateSearch.com, a service that allows consumers to shop for the best mortgage rate, anonymously and for free.
Tell others about
this page:
Comments? Questions? Email Here