Mortgage Video & Blogging Community

When shopping for a mortgage (purchase or refinance) it’s very easy to lose money in the time it takes to make a commitment. Perhaps the commitment is who or what mortgage provider to choose. Or maybe it’s making the decision to float or lock your interest rate. Perhaps it is hard to choose the exact type of loan that fits your needs. Let’s focus on the most common question a Maine Mortgage Broker will here throughout his career. What’s your interest rate today?

All the “experts” tell you to “shop for rates” — but they don’t tell you how to shop for rates. Without an understanding of how mortgage pricing and lock-in periods work, calling up a lender to find out their interest rate could provide you with mostly useless information.

If you simply call up and ask a lender for the best mortgage rates in Maine, the loan officer is likely to say whatever you’d like to hear.

One lender may quote a “floating” rate (seven or twelve day lock) and another may quote you a forty-five day lock. Another lender may quote you the rate for two points and another may quote you the rate for one point.

Also, If you call lenders on different days, you could get widely different quotes because rates don’t stay the same every day.

When you call a Maine Mortgage lender to shop for rates, you have to know at least two things:

How many points you want to pay and how long you want to lock in the rate.

You don’t have to really intend to lock in the rate, but you have to give them all the same parameters so that you get meaningful quotes.

It’s also important to get your mortgage rate quotes on the same day, and at around the same time.

By the way, you can’t trust ads in the newspaper, on the radio or on television. Ads are generally placed at least a day or even a week in advance. Since rates change every day (sometimes several times a day), ad quotes aren’t reliable.

There are still many other variables that will effect mortgage pricing (property type, occupancy, credit score) but by simply understanding how rate locks and discounts points work, you will be able to better shop for a competitive Maine interest rate.