Dan Hubrich with Castle & Cooke Mortgage is back! Today he’s explaining how to understand and differentiate between Mortgage Loan Quotes when you are getting ready to buy a home.

I’d like to talk a little bit about interest rates this month and how one lender differs from another one. At the end of the day, almost all mortgages are sold to Fannie Mae, Freddie Mac, or Ginnie Mae at some point in time (the 3 big government sponsored enterprises).  Credit unions and other small boutique banks may not sell to them but for the most part, almost everyone else does. So…what that means is that we are looking at the same guidelines and rates. However each individual lender can then price things a little differently how they feel best suits their client. This is where it gets tricky though. When you’re driving down the freeway and you see a super low rate on a billboard, or if you see a low rate pop up on the internet, it’s almost a guarantee that it’s not telling the whole story. The mortgage industry is highly regulated so no lender can just flat out lie to you BUT they are allowed to paint a pretty picture of the absolute best scenario and have it all disclosed in the fine print.

So when you see that really low rate, there is a good chance that the lender is assuming you have a 780 credit score, 40% down, and that you’re ok to pay a point or two in origination and/or discount fees. The whole point of advertising that teaser rate is to get you to pick up the phone and call for more information. But here’s the thing. Any lender can do that! But it may not be your particular situation and it may not even be a good idea for you even if you do qualify. Paying more for a lower rate is a great idea if you’re sure you’ll live in the home for a long time but it’s a terrible idea if you think you’ll move in 2-3 years. So take everything you see and hear with a grain of salt and it’s always best to talk to a professional who will explain to you how everything works and then YOU pick the best rate for your situation VS the lender telling you what to do. Please reach out to me anytime with any questions about this and my team will always give you honest information to help you make the best choices.