Interest rates are presently unstable. As a result of this instability brought on by some of the global and national events, we are in a very unique situation where rates literally from one day to another multiple times per day. The market for hunting for terms and price above all else was in 2020. Here’s what you need to understand…
If you are so incredibly fixated on rate and price alone you could be setting yourself up for failure and the reason why is this 0.125 to .25% in rate in the grand scheme of things is not that big of a deal especially if you consider the fact that you could refinance again for little or no cost depending on the lender you’re evaluating. Yes there is an argument to be made 0.25% over 30 years is quite a bit of money, but the reality of it is no matter how good your intentions are nearly everyone either sells their house or refinances anyway. No one actually has their loans for 30 years anymore. The same thing as a 30-year roof they say it’s a 30-year roof but in actuality, the actual economic life of a 30-year roof is about 23 to 25 years on the average same exact concept.
So when you have a situation where you’re after interest rate in price alone and nothing else matters you need to be aware of your lender is working off the volume. A lender who deals strictly in volume will not take on your loan more than likely unless your loan is perfect e.g. W2 income, credit scores 800 +, 50% loan to value equity, primary home with no rental properties, tons of money in the bank, etc basically you need to be an underwriting gold medallion if you’re going to take this approach if you’re not, you’re setting yourself up for failure.
Volume lending can result in delays and responsiveness. This in turn can parlay in appraisals for example the quality of appraiser you’re probably going to get is probably not going to be someone who is top-notch reason being is because you’re dealing with a price-driven lender who nickel and dimes everything to pass the savings on to you which sounds like a good deal for you, but the reality of it is if you don’t have the right appraisal on your house because the appraiser is just throwing it together so they can turn it, and you need a certain loan to value in order to procure a certain interest rate. It is not a good recipe for success.
It’s not just a mortgage firm you’re going to deal with, a price-driven title and escrow company operating so thin so the type of experience that you might have to go through as a consumer may or may not result in the closed loan based on all these other elements. So it’s important to understand you should be focused on getting a good, competitive fair interest rate working with a lender who is dedicated to customer service because in this environment. Keep this in mind next time you’re in the market for refinancing or buying a home.
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