When its comes to shopping for mortgage rates the American public has been very misinformed. Most believe one company is trying to rip them off while one is trying to give them the deal of the century.
It’s so easy to believe this when you hear and see mortgage related ads on the TV and radio talking about having banks fight over you to give you the best mortgage rate.
The reason why you want to shop for mortgage rates the same day is this. To fairly be able to compare rates against competitors you need to get all of that info that day.
No waiting til tomorrow or when somebody is supposed to call you back in the morning. What you are doing is making it unfair on yourself. Now you are going to have to call all of those companies back the next day and get all of their info again.
The reason is because mortgage rates move on a daily basis. So what some mortgage company said the day before is not going to be the same thing today (more than likely). Interest rates for mortgages for the most part are based on the 10 year Treasury Bond.
All mortgage companies should be within .125% of each other on every type of mortgage (30, 15, 10 year, etc) offered.
Most mortgage companies have about 20 different kinds of mortgage or loan programs and each come with about 12 different interest rates that day. There is the zero point interest rate (market rate for the day) and then there are rates where you can buy down the rate. Buying down the interest rate is an option for you to pay money up front (not out-of-pocket but commonly rolled into the loan) for a lower interest rate.
I believe one of the reasons why people spend an insane amount of time shopping for mortgage rates is they haven’t found a mortgage banker they like.
A very good mortgage banker will listen to what you are trying to accomplish and work with you. Some don’t listen and get caught up in things like costs and rates. While those are important, we already know that interest rates and closing costs should be very close to some place else.
Even though I am a big fan of the 30 year mortgage for everyone it might not make sense for you. Maybe you will only be staying in the house for 4 years and a 5 year adjustable rate mortgage at a lower rate makes sense. And maybe the mortgage company will pay your closing costs if you take the higher rate on the adjustable mortgage.
All of these come back to if that mortgage banker is listening to you. Whats important for you to know is if taking one of those other options makes more sense than the 30 year loan than act on it. Do you really want to spend another day shopping mortgage rates on a different loan type?
Peace Of Mind
If you know you need to refinance. Or you have a purchase agreement on a house than commit to getting all of your mortgage shopping done the same day. My suggestion is you call a company like Quicken Loans and your bank first.
You should hear roughly the same numbers on similar loans from both places. If you do then I would not spend anymore time calling around. Pick one of the two and move forward.
Interest rates for mortgages move on a day-to-day basis. What you were quoted yesterday might not be available today. Rates might have moved in your favor overnight or maybe not. I saw it happen both ways.
What I tell everybody is do all of your shopping the same day. Call two or three different mortgage companies at most. Two might be all you need.
If a mortgage is suggested to you that hits your goals than pick one of the companies and move forward that day. Because if you wait till tomorrow you’ll have to go through the entire process again.