Sunday, January 11, 2015

Getting The Lowest Interest Rate

This past week, I received an email containing the latest interest rate news from a preferred lender of ours at Keller Williams.  I receive multiple emails per week with different rates from different banks, so I have a habit of marking them as read and attempting to return to them at a later time.  As we all know, this is a strategy that never works.  Things get busy, more emails pile up, and you seldom return to the information.

I have a few buyer clients that have decided that 2015 is their year to purchase, so when the rates came this time, I knew it was information I needed to not put off until later.  Rates have been low for a couple of years now, but when I opened the sheet and didn't see a number above 4% for any type of mortgage, I was blown away.

I don't want to advertise any exact numbers on the blog for various reasons, but it was a good reminder that the deal you can get on a mortgage right now is incredible.  If 2015 may be the year your decide on a purchase or a sale & purchase, it's getting close to the time where you want to be making initial contacts, especially to lenders.

A few things to remember-

1.  Rates change-  They are low now, but until you get in touch with a lender and begin the loan process, your rate isn't locked in.  I'm not in the market to predict the future, so I can't say how long they'll be low.

2.  Don't over-purchase-  With lower rates, comes more affordability.  Don't over purchase just because you can get a great rate.  I always like to think of the purchase less for the rate and the purchase price, and more for the monthly payment that I'll be paying for the next 30 years.  It doesn't make sense to lock up a higher monthly payment by buying a more expensive house just because you can get a lower rate.  Sounds simple, but it has handcuffed many people in the past.

3.  You don't have to buy-  I've had a number of people in the past few years say "rates are so low, I should be buying."  To some degree it is true, but that isn't the way to think about making a six-figure purchase.  Low rates make buying more a part of the conversation, but your reasons for purchasing a home should be more than low interest rates.

4.  Closing is #1-  Rates are important, but the most important thing is working with a lender that can get a deal closed.  When I recommend lenders, I always tell clients that I recommend people that I've closed deals with.  We all have an interest in getting you into your new home as quickly and efficiently as possible.  You could be getting the best rate in the world, but if the lender cannot get the deal done, the rate doesn't matter.  Lesson:  when you shop for lenders, don't just shop rates.  Make a decision based upon a variety of factors including recommendations, comfort level, rates, fees, and any other factors that are important to you in purchasing your home.

If you'd like my list of recommended lenders, shoot me an email and I'd be happy to get you in touch with any of the folks I consistently do business with.

Take care,
Scott Morrison

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