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On Procuring a Mortgage September 4, 2009

Posted by shaferfinancial in Finance.
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Much has been advertised about shopping rates for mortgages.  But the facts confound the shopper.  Over the last 6 months, for example, lenders have issued rate sheets [issued at the beginning of each work day and then intra-day when rates change] on average every 4 hours.  75% of the time more than one rate sheet is issued every day.  So you call one mortgage company in the morning and they are working off of the morning rate sheet, then you call another and they are working off of an updated rate sheet and then you call another the next day and they are working off of the next day’s rate sheet.  Even worse for the consumer is they call and get a rate on one day and then decide to go with that company and the real rates have dropped but they give you the rate they quoted you first.

So it is impossible to “shop” rates.  Your best bet is to find an originator which will shop for you at a predetermined price.  Come to a decision on what they will charge you for your loan up-front and then let them find the best deal for you.  And then make them prove it by providing the documentation!  You will find it is a much easier way to do business, and creates the correct set of incentives for your loan sales person.  Why continue to participate in a system that automatically puts you in competition with your loan originator for $$$, when s/he holds all the cards?

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