Attention Mortgage “Shoppers”: Interest Rate Is The Last Thing To Discuss
I know, I know. You want to know the rates for today (aka rates du jour). I can’t tell you that. And: I won’t tell you that. Not on the phone, not without meeting with you and reviewing your financial documents, and not without discussing programs and how to structure the loan (and there could be several ways to structure a loan).
A client, interested in making an offer for a new construction unit, referred to me by a previous client, called last week and wanted to know “my best 30-year fixed, and my best 30-year fixed interest only, doing a 100% LTV loan.” He did not want to give me any income or asset information, and certainly did not want to give me his social security number to evaluate credit history. He just wanted his rate.
I can’t do anything. Well, I could do something: I could just give unrealistic, low rates, try to lure this person in, and then change things as we get near the closing date. But that would be ’somewhat’ unethical, at the very least.
I am not alone. Tony Gallegos, in a recent post, refers to a really wonderful post about the same idea. One of the main points: don’t choose your loan officer by (only) interest rates. If you want the lowest payment, an interest only program may be for you, though that 5-year ARM with an interest only payment will have a higher interest rate than the same ARM with a principal and interest payment. There are many, many examples of choosing a program with a higher interest rate
Again, a higher interest rate may be in your best interests.
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