The answer is nobody. Not anyone lender has a monopoly on the market. Interest rates change on a daily basis. When you hear interest rates advertised on the radio or online or you hear that interest rates drop again the information is automatically outdated. Why is this? Very simple answer-mortgage rates are tied to mortgage bonds, more specifically mortgage-backed securities (MBS).
When you take out a home loan, you are in essence creating an investment vehicle for the investor, the timely payment of that interest you are paying for the benefit of having a mortgage loan. These investors buy and sell these mortgage-backed securities every day on Wall Street driving money in and out of the bond market, thus changing mortgage rates multiple times per day everyday. Because home loans/mortgages are bought and traded every day on Wall Street just like a stock in a company is, rates move continuously. In other words when you get an interest rate quote from a home mortgage lender, that quote is only good in real time in that very instant because of the fact if you don’t lock in at that particular time, the interest rate can and likely will change again.
How Changing Rates Affects The Whole Loan Picture
How this applies when comparing rates. You call up the first lender, and they offer you a 30 year fixed rate mortgage at 3.625% at no points. You decide to continue to shop to try to get something better, you call up second under and they offer you 3.5% at no points, second lender sounds better right? As soon as you hang up the phone with the first lender, by the time you get the answer of the second under, the first lender’s interest rate could easily have changed to 3.5% at no points, thus illustrating that finding the lowest rate is borderline impossible because everybody operates off of the same mortgage-backed securities market and everyone has access to the same rates, in real time and all directly or indirectly sell their loans to Fannie Mae or Freddie Mac.
*Mortgage Tip: there is no regulation or guideline that states a lender must give you the lowest possible interest rate. The higher the interest rate, the more the lender generates in terms of additional profits off the loan you’re taking out, pure and simple.
Obviously, mortgage companies are in business to run a profit, but a fair profit, not one that is to the detriment of a consumer, but are reasonable rate given the market and the consumer’s qualifying ability. If you’re looking for the best rates for a Sonoma County home loan, start today by getting a complimentary mortgage rate quote for your purchase or refinance loan.