Shopping Around for a Mortgage

Here are 2 great articles on about mortgages and this current real estate market.  The 1st of the 2 articles talks about buying the rate down by paying points.  It states that “Stressed markets do offer one significant bargain: buying down the interest rate by paying points. In 2005 it cost about 1.5 points to buy down the rate by .25 percent on a 30-year FRM. In early 2007 it cost about 1.125 points. Today the price is down to about half a point.”  I have actually seen you be able to by .25% of the loan amount to lower the rate by .25%. 

 

http://finance.yahoo.com/expert/article/mortgage/131734

The 2nd article below states that “In ordinary times, one loan is about as good as another because most lenders’ offers on 30-year loans are clustered within around a quarter of a percentage point. Not now. With the economy so shaky, lenders are all over the map in how much risk they’re willing to take in making loans. So it really pays to shop around. And keep checking, because rates are constantly changing. One day in late December 2008, Wells Fargo (NYSE:WFCNews) was offering 30-year conforming loans at 5.0% plus one point, while Bank of America (NYSE:BACNews) was offering the same kind of loan at 6.625% plus one point, according to Cameron Findlay, chief economist of LendingTree.com, a division of Home Loan Center. No offense to Bank of America, but only a sucker would have borrowed from it instead of Wells Fargo that day.”  One of the reasons for the large interest rate swings are because lenders get so busy that they have to increase their rates are so they can decrease the amount of loans coming in because they can keep up with the current influx of business.  This is a good problem.  This is one of the advantages of using a mortgage broker because we can do that shopping for you to insure you the lowest rates out there. 

http://biz.yahoo.com/bizwk/081231/dec2008bw20081230361031.html?.&.pf=loans