Advertised Mortgage Rates & Why They Are Different Than What You are Quoted

I have talked about this numerous times but it is nice to see the article from this morning’s Wall Street Journal title “Mortgage Rates Plumb The Depths, but Hard Part Is Getting That Quote” to back me up.

“The gap between the lowest advertised mortgage rate and the average rate that borrowers actually get is as high as it has been in two years, save a single week last September. As of last week, the lowest available rate—according to a survey of more than 200 lenders by—was 3.75% for a 30-year fixed mortgage, but the average rate was 4.39%. At the current 0.64 percentage-point spread, the difference in rates could mean an extra $53,000 in interest payments over the life of a 30-year, $400,000 mortgage.”

The main reason for this is what you see online can be a loan to value of 60% or less, 15 day lock period, etc. along with people trying to hedge the market and quoting interest rates that don’t yet exist hoping rates drop by the time you call.

This is why it is more important to deal with someone you trust and who is an expert than the person quoting you the lowest rate because it’s not what you are quoted, it’s what you are locked in at.