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2) What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this at their
fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.
professionalrealtypartners.com and look for the green MMG Weekly banner – this is a copy of our weekly newsletter, let us know if you want to
be added to our weekly distribution list or add yourself from the newsletter icon)
3) When Bernanke and the Fed “change rates”, what does this mean… and what impact does this have on mortgage interest rates? (The
answer may surprise you. When the Fed makes a move, they can change a rate called the “Fed Funds Rate” or “Discount Rate”. These are
both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage
rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in
response to inflation. For more information and explanation, just give us a call).
4) Do you have access to live, real time, mortgage bond quotes? (If a lender cannot explain how Mortgage Bonds and interest rates are
moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s
newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is
only able to grab yesterday’s paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time
and what market conditions could cause changes in the near future? No way!)
Be smart... Ask questions… Get answers!
More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times
in your entire life… but we do this every single day. It’s your home and your future. It’s our profession and our passion. We're ready to work for
your best interest.
Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are the rules and secrets you must know to “shop” effectively.
First, IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS. But you didn’t really need us to tell you that, did you? Mortgage money and interest rates all come from the same places, and if
something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length
of the lock-in? If fees are discounted, is it built into a higher interest rate?
Second, YOU GET WHAT YOU PAY FOR. If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best
case, expect very little advice, experience and personal service. Worst case, expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t BEST. But if
you want the cheapest quote – head on out to the Internet, and we wish you good luck. Just remember that if you’ve heard any horror stories from family members, friends or coworkers about
missed closing dates, or big surprise changes at the last minute on interest rate or costs…these are often due to working with discount or internet lenders who may have a serious lack of
experience. Some recent reason's, your friends Loan Officer got out of business when the easy money disappeared. Where are all those Loan Officer's that were too embarrassed to call their
clients when the boom started to bust? Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial
transaction most people will make in their lifetime. That being said – we are not the cheapest. Of course our rates and costs are very competitive, but we have also invested in the systems and
team we need to ensure the top quality experience that you deserve.
Third, MAKE CORRECT COMPARISONS. When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones
that the lender controls. And make sure lender fees are not “hidden” down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since
they are third party fees – they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at
the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison. Also, when you know where the market is headed, it's alittle easier to anticipate a lender's re-price
and lock in anticipation of a rate change for the worse- if you allow us to lock in your rate you can shop with alittle insurance!.
Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND. This means that you can have any interest rate that you want – but you may pay more in costs if the
rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate.
Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice
and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.
Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY. This means that if you are comparing lender rates and fees – this is a moving target on an hourly basis. For
example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same
terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.
Again, our advice to you is to be smart. Ask questions. Get answers.
As you can imagine, we at Richland Financial, wouldn’t be encouraging you to shop around if we weren’t pretty confident that we feel that we can give you a great value and serve you the
Please call us with any further questions you may have at this time – we are ready to work for your best interest!
Contact Us Now! or Request More Information Below
Effectively Shopping for a Mortgage, HERE’S THE INSIDE SCOOP ON HOW TO DO IT RIGHT!
Once you are satisfied that the person you are talking to is a top quality mortgage advisor...
First: make sure you are working with an experienced, professional loan officer. The largest financial transaction of your
life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the
issues that may arise along the way. But how can you tell?
Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO
NOT KNOW THE ANSWERS…RUN…DON’T WALK… RUN…TO A LENDER THAT DOES!
1) What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage
Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage
Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes
on the wrong indicators.)