When was the last time you encountered something that seemed too good to be true? Unless you got lucky, I’m going to go out on a limb and assume that it really was too good to be true. This is often the case in what is advertised to homebuyers
The most common pitfall I encounter as a loan officer among my clients is solely focusing on the rate, and more specifically, the rate that is being advertised. This causes consumers to overlook the fine details, which can be as or even more important than the published rate. However, rates are important, but you need to look deeper than the advertised percentage.
One of the most common questions I receive is, "Why don't I get the rates that I see advertised?"
First, the super low-interest rates that you see advertised could be for an adjustable rate mortgage, which requires a unique situation to be a good fit. Or, it might be for a 15-year amortization instead of the typical 30-year. I'm a huge advocate of 15-year loans because of the difference in the interest rate and the interest repaid over the life of that loan. This means that over time, you’ll receive a significant discount on a 15-year loan when compared to a 30-year loan. However, 30-year loans tend to be the most affordable.
Out of the 188 loans that I closed just a couple of years ago, less than 10 percent fit into the perfect package that advertised rates require. That means 90 percent of my customers did not fit into the ideal box for the advertised rates, and you have just a 1 in 10 chance of qualifying for the lowest rate. But why?
The published rate is commonly based on the following:
Published rates are almost always lower than what you will qualify for, so plan accordingly and work with a loan officer that will give you the full picture. Stephanie Weeks (that’s me!) and the Weeks Team can bring you up to speed on what you need to know about the following topics:
Every year an average of 21 million people apply for mortgages in the US, and only around 7 million close. I'm on a mission is to change that by spreading mortgage education. Sign up for my newsletter to be a part of my Mortgage Peace Movement!