Mortgage Tips - What's Your Rate?

Ever ask a mortgage broker for a rate only to hear the phone go quiet on the other end?
Besides the purchase price of your home, you mortgage interest rate is the most important factor determining how much your monthly payments will be.

You would think that when you call a mortgage company that they would at least know the rates, right? Well the answer is YES and NO. But what usually happens is something like this:
All of a sudden you (the client or real estate agent) gets a barrage of questions from home value, loan amount, job info, credit info and it goes on and on and on. (Sound familiar yet?) You have to think to yourself, "all I wanted was a rate, not tell my life story." By the time the loan officer get done with all the questions your head is spinning and your not even sure why you called.

It really boils down to two different questions: The first question is what are the rates? You can find these anywhere (including on the right side of my blog). Published rates tend to be for borrowers with:

740+ Credit Score
80% Loan to Value
Can prove income with a debt ratio under 30%
Can prove liquid assets for at least 12 months PITI
Has a proven Credit History of paying bills on time.

You got it! This applies to about 5% of the population. Now the second question gets a little more complicated. What's my rate?

While any "good" loan officer should be able to give a "some idea," it is a guess. Think of your rate like a snowflake (I'm serious here) While from a distance they all look alike but when you look closer they are all different. Of course loan officers know the "lowest" rates (we can see them on the right side of my blog) we just don't know if you qualify and need to ask some questions. This is were the fun starts. To find out what "your" rate us broker guys need some more information. I have come up with a list of 9 things that are needed to narrow down the rate:

Property Type
Property Use
Income and Asset documentation
Loan Type
Loan Amount
Loan Purpose
Middle FICO (credit score). Need to use caution here. Not all credit bureaus are alike. Free reports do not tend to match mortgage enhanced reports. This will be a topic of a future blog.
Appraised Value or Purchase Price (whichever is lower)
Zip Code

Confused yet? Don't worry, you're not alone (including the loan officer). So what do you do now? and what's my rate?

In the long run a client will chose a real estate agent due to trust. Your client needs to chose a mortgage broker the same way. Building relationships and trust will help ensure that you get the best rate and terms you qualify to get.
While I hope this help take the "edge" between real estate agent and loan officer if you have any questions please leave a comment, drop me a email, or the old fashion way. Call me, I will answer.

Happy Selling!
Tony Grego - Indiana Mortgage Broker