As a mortgage broker, I often get asked about my best possible rate. Obviously, the rate has a huge influence on “where” you get your mortgage, but “who” you choose to work with might be even more crucial, especially when dealing with the Portland real estate market.
The first thing you should do is ensure that your professional mortgage planner has the right experience. A home represents the most significant financial transaction of your life; therefore, it is much too important to leave in the hands of someone who is incapable of giving you the proper advice or troubleshooting the various issues that could arise during the process. The problem is knowing how to tell if your mortgage planner has the appropriate experience.
Following are four basic questions that your lender absolutely has to answer correctly. If he or she fails to provide the right answers, RUN — DON’T WALK — to a lender who can provide the correct responses.
How are the mortgage interest rates determined?
The only right answer is the rate provided by the Bank of America for mortgage-backed securities and variable mortgages; Government of America Long Bonds for fixed rates or specialized mortgage bonds. If a mortgage originator is a professional, he or she should know how your interest rate is determined. Avoid working with a lender who has his or her eyes on the incorrect indicators, or — worse yet — has no conception of what the indicators even are. A mortgage originator should review these indicators so you can have confidence in the initial strategies as well as long-term mortgage management.
What are the affects of rising interest rates in upcoming years if a fixed-rate product is selected?
Most lenders will answer by saying that rising rates will not affect you if current mortgage rates Portland are locked in. This is simply not correct, and it represents an incredibly dangerous line of thinking. Ask yourself what will happen at renewal if rates happen to rise from the existing emergency low levels to the more normal level of 2% or more higher than today. This is referred to as payment shock, and it is very risky when it comes to your financial health in the long term. When you work with a lender who is able to manage your mortgage proactively and who notifies you when rates go up with suggestions as to how to minimize the effects of payment shock, you have the potential to save thousands of dollars. A truly talented broker can also give you accurate numbers to work with based on a mortgage payment calculator.
What is the recommended strategy, and why is it being recommended?
The key word in this question is “strategy.” If a lender or mortgage broker in Portland is unable to give clear articulation to the strategy behind his or her recommendations, it’s likely that you are receiving a simple rate quote, which is something that, frankly, anyone can do. This is your largest investment, so you need to ensure that you are dealing with a professional who considers your overall financial wellness with a solid financial plan.
What commitments are being offered to personally manage the mortgage over the long term?
This question is the most critical of the four mentioned here. Numerous lenders lack the ability or the desire to manage your mortgage proactively over the long haul. How can you take advantage of future changing markets if they aren’t being watched by someone for you? Who will make sure that you don’t fail to take advantage of opportunities to renegotiate? If you are thinking about a variable rate mortgage, why would you engage with a professional who lacks the commitment to keep an eye on it? The real job of a mortgage professional begins when your mortgage is funded. It’s possible for anyone to sell you a mortgage, but only those mortgage professionals who are truly committed can manage that mortgage effectively over the long term. This approach of long-term management can reduce your total cost of home ownership significantly — isn’t that the point?
It is more than likely that this represents one of the most significant and important financial transactions of your life. In fact, you might engage in this process only four or five times. However, a great mortgage professional should be able to accomplish this each and every day with the best mortgage rates Portland. This is about your home and your future. A truly terrific mortgage broker professional should be ready and able to work with your best interests in mind.