Questions to Ask Your Mortgage Lender

The best advice we can give you is to make sure you are working with an experienced, professional loan officer. 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 4 simple questions your lender absolutely must be able to answer correctly. If they don't the answers, run! Don't walk. Run to a lender who does!

The ONLY correct answer is that mortgage interest rates are based on 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.

A professional lender will have this at their fingertips. At Cash Now Refi, for example, we carefully review all the weekly economic reports and events that may cause mortgage interest rates to fluctuate.

The answer may surprise you. When the Fed makes a move, 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 move, mortgage interest 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 response to inflation.

If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing.

Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!

More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life, but we do this every single day. It’s your home and your future. It’s our profession and our passion.