here’s the inside Scoop on how to do it right!
First: make sure you are working with an experienced, professional mortgage specialist. The largest financial
transaction of your life is far too important to place into the hands of someone who is not capable of advising you
properly and troubleshooting the issues that may arise along the way. But how can you tell?
Here are four simple questions your lender absolutely must be able to answer correctly.
If they do not know the answers…run…don’t walk… run…to a lender that does!
What are mortgage interest rates based on?
(The only correct answer is Mortgage Backed Securities or Mortgage
Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as
Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who
has their eyes on the wrong indicators.)
What is the Total Cost of this mortgage over the period of time you will be in the home or have the mortgage?
(The only way to truly know if the mortgage you are considering is best for you is to compare the Total Cost. The single
most critical element of your mortgage is the Total Cost over the period of time you will have the mortgage or be in the
home. Most loan officers will not give you this figure, but we feel it is USE’S role to make sure you are making a fully
When Ben Bernanke and the Fed “change rates”, what does this mean… and what impact does this have
on mortgage interest rates? (The answer may surprise you. When the Fed changes interest rates, they can change a
rate called the “Fed Funds Rate” or “Discount Rate”. These are both very short- term rates that impact credit cards, Home
Equity credit lines, auto loans and the like. On the day of the Fed interest rate change, mortgage rates most often will
actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in