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Imagine what it would be like if you knew a mortgage industry insider you trusted who would give you their very best advice on how to get the best Massachusetts mortgage rates.
If you knew for certain that you weren't being taken advantage of, you would have a lot less stress shopping for a mortgage, wouldn't you agree?
Well you're fortunate to have visited this website because you've found a trusted mortgage industry insider that's willing to share this information to you for FREE.
The Massachusetts Mortgage Broker is the leading authority on Massachusetts mortgages and is here to help demystify the mortgage process by providing you with the information you need to make an informed decision. Take some time to explore this web site where you will discover a wealth of information about mortgages.
1. Select a mortgage company over a bank or credit union.
The most important thing you can do to ensure that you get the best rate and terms on a mortgage is to select a mortgage company over a bank or credit union. At first glance, this may seem counter-intuitive. After all, shouldn't banks and credit unions offer better rates since they are lending their own money?
The problem with this logic though is that the average mortgage shopper is not privy to the inside workings of the mortgage industry nor understands how mortgage rates are determined.
Let's first address the topic of mortgage rates. Mortgage rates are not simply set by a lender to whatever they feel like for that day. Instead mortgage rates are determined by the daily trading of mortgage-backed securities (MBS) on a bond exchange similar to how stocks are traded on Wall Street. Like the price of stocks, mortgage rates are determined by the market. Furthermore, everyone in general has access to the same mortgage rates like any individual investor can buy a stock for the same price.
So why are Massachusetts mortgage rates different from company to company?
In a nutshell, it has to do with the cost side of the equation and banks and credit unions have a much higher cost structure than mortgage companies.
For example, loan officers for banks and credit unions are employees whereas loan officers for mortgage companies are 100% commission-based salespeople. Banks and credit unions have to pay salaries and benefits to their employees whether or not they are bringing in business whereas mortgage companies only pay their loan originators when a loan closes and generally do not provide any benefits which are costly. In addition, banks and credit unions have to maintain expensive retail locations for their customers whereas mortgage companies can select less expensive office space.
As a result, the cost of originating a loan for a bank or credit union is much more expensive than for a mortgage company. The way banks and credit unions account for that cost is by marking up the mortgage rate to a much greater extent than that of mortgage companies which run lean and mean.
It should come as no surprise then that mortgage companies generally offer mortgage rates that are 0.250%-0.500% better than bank and credit unions and usually with lower closing cost as well!
2. Use a local Massachusetts mortgage company over an Internet-based or out-of-state mortgage company.
Simply put, Internet and out-of-state mortgage companies provide a poor customer service experience. Rather than dealing with a mortgage professional, you deal with a loan originator in a call center environment. These types of operations are based solely on volume due to the large marketing costs they have to incur to constantly attract new customers. As a result, you are treated like a number whereas a local mortgage professional is going to provide you with personalized attention.
Since Internet and out-of-state mortgage companies do not have a local presence, they do not rely on their reputation in the community and ultimately have no accountability for their actions.
Local Massachusetts mortgage companies on the other hand are keenly interested in their reputation and building good will in the community in order to generate word-of-mouth referrals.
Finally, Internet and out-of-state mortgage companies are not familiar with the Massachusetts area and our local business practices. Due to this unfamiliarity and lack of knowledge, the loan process often is problematic.
3. Determine the specific loan program you want and compare rates from at least 2 mortgage companies.
It is critical that you "shop for mortgage rates" from a minimum of 2 mortgage companies. It is very common for consumers to receive referrals from real estate agents to a loan officer. This often is a good start, but you should still keep the loan officer honest by comparing his/her mortgage rates with their competition.
The reason behind this is that oftentimes there is an "in-house" or some other kind of referral relationship that benefits the real estate agent or their company if you use the recommended loan officer. This referral benefit however comes at a cost...a cost to you in the form of a higher mortgage rate or increased closing costs!
4. If rates and closing costs are close, choose the loan originator that is a certified mortgage professional even if theirs is not the absolute best deal.
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