Interest rates, are they the same?

7 Replies

Should I shop around for a better interest rate or take the first offer I get? I know they run my credit every time and I don’t want to keep taking hits but at the same time if I get a good lender then I’ll stick with them until the process is over. Any help?

@Thomas Lee Nuckles

Shop around until you know you’ve found a good lender. It doesn’t have to be the lowest rate, but you won’t know if it’s a good deal if you have nothing to compare it to.

My deal I just signed, for a multi family under my LLC; 4.8% interest, 20% down, 25 year amortization, and 10 year balloon. If it's an owner occupied you should be getting 30 year amorts at less than 4.25%. Maybe even 4%.

If you are going owner occupied, you should wait a few weeks.  The Fed is gonna cut interest rates and you will get a rate under 4% if you have good credit.  ;-)

Im sure ALL this fed cut stuff is driving the mortgage brokers crazy.  They are probably all sitting on their thumbs waiting for the rate cut to hit.  

Originally posted by @Alan Grobmeier :

If you are going owner occupied, you should wait a few weeks.  The Fed is gonna cut interest rates and you will get a rate under 4% if you have good credit.  ;-)

 The market already has the fed rate drop baked in. Rates are down. They usually over-compensate; I wouldn't be at all surprised if mortgage rates (long term debt) goes up following the drop in the (short term) federal funds rate. That's what happened more than 50% of the time in the last few years.

- People think the fed will drop rates.

- Mortgage backed securities adjust on Wall Street accordingly.

- It's formally announced. 

- Whoops, mortgage rates dropped too much and/or everyone that waited to start their refinance locks today, impacting supply/demand of mortgage money. And, so, mortgage rates go up the very next day.

Two times ago it was even quicker; many lenders were posting same-day rate pricing changes (for the worse) within an hour of the announcement. 

Im sure ALL this fed cut stuff is driving the mortgage brokers crazy. They are probably all sitting on their thumbs waiting for the rate cut to hit. 

A lot of people are refinancing right now. Basically everyone that purchased a home last summer, is refinancing now (or should be, hint hint). Mortgage origination volume (my volume, at least) is about double the June/July norm as a result. Appraisers are backed up; every Realtor on eeeeeeevery purchase transaction I'm working on is calling me eeeeeevery day asking where the appraisal report is at. I've switched to 45 day locks on refinances exclusively. 

Originally posted by @Thomas Lee Nuckles :

Should I shop around for a better interest rate or take the first offer I get? I know they run my credit every time and I don’t want to keep taking hits but at the same time if I get a good lender then I’ll stick with them until the process is over. Any help?

 Right, back to OP.

An independent mortgage broker can shop it with the entire wholesale marketplace with just one credit pull. It's not like a car loan where 20 different credit inquiries show up. Your SSN isn't typically even released to the specific wholesale lender until they are settled upon as the right home for your loan, which can include more than just rate/fees. For example if you read my previous post you will get the sense that lenders (wholesale and retail) and appraisers are backed up, but you have a 25 close of escrow. Whelp, a few wholesale lenders are sucking it up and paying out lots of overtime and still have 1-3 day underwriting turntimes, others are at 8-12 days just to get an underwriter to look at a paystub (& then tell you there's something wrong with it, resubmit and get to the back of the line). 

For that 25 day close of escrow, that speed difference is certainly a factor worth considering.... this lender in particular is presently getting most of my purchase business (even if they don't include weekends in their days count):

Originally posted by @Anthony Wick :

@Thomas Lee Nuckles

Shop around until you know you’ve found a good lender. It doesn’t have to be the lowest rate, but you won’t know if it’s a good deal if you have nothing to compare it to.

My deal I just signed, for a multi family under my LLC; 4.8% interest, 20% down, 25 year amortization, and 10 year balloon. If it's an owner occupied you should be getting 30 year amorts at less than 4.25%. Maybe even 4%.

How do I shop around if I don't know my exact interest rate until I find a house? I'm mainly referring to pre-approved loans so i'll be ready to go when the time hits. Can I even compare interest rates on pre-approved loans?

@Thomas Lee Nuckles  Listen to the lenders on this site. A financial institution will be able to tell you what kind of interest rate you can get, based upon your credit, cash down, etc. You don't have to lock in said interest rate with anybody. Easy to shop around and ask. They know most people are shopping around. Then when  you establish that relationship with somebody you're both comfortable with and like their terms, then you can stick with just them if you like. And, it's not just interest rate, but the entire terms of the loan you should be looking at. 

About your credit getting pinged if you apply for 10 loans and then you pick one and it is within a month or two the ping to your credit will be small and will drop off quickly.