“What is the Interest Rate Today?” – Good Question

It seems like every week I get a call from someone wanting to know just the interest rate. We’re completely fine with quoting interest rates. You won’t get smoke and mirrors from us. However, it doesn’t work that way.

While I’m happy to give you a rate quote, I absolutely positively need to know a few things about you before I can say something and put my reputation on the line. I need to know things such as wheter you’re self employed or if you’ve had a bankruptcy in the past two year or if you’re a first time home buyer etc.. Believe it or not these things can significantly affect the interest rate on your loan.

Many people seem to interpret my questioning as a stalling technique or some kind of snake oil sales method. It isn’t.  If you don’t believe me let me show what seasoned real estate agent Vicki Moore has to say:

People ask me all the time, “What are rates?’’  I have a standard answer, “That depends.”  But they don’t want to hear that.  They want to hear “6.5.”  It doesn’t work that way.

When you see E-Loan, Ditech, LendingTree or whoever offering a 30 year fixed for a low 6.5%, that doesn’t mean for you.  That means for the guy that meets the criteria.  If you don’t fit the criteria, you don’t get that interest rate.  But it gets people to call.  It’s called a teaser.

They need to know what your income is and what your debts are.  Child support?  Alimony?  Taxes owed?  Credit score?  Do you have car payments?  How many are left?  How long do you expect to own the property?  How much money will you put down?  Is the monthly payment an issue?  Or are you flexible on that?  Are you okay with a pre-payment penalty (a fee charged if you change loans before a specified time period)?  Buying with a second person?  Do they have child support or alimony payments?  Taxes owed?  What’s their credit score?  You get the idea.

Vickie is an agent in San Mateo, California. I didn’t pay her to write this. I’ve never done business with her, and I’ve never even talked to her. However, she hits the nail on the head.  A lender needs to know YOU before they can quote a rate.

I would never trust a lender that spits a number without taking the time to understand your situation and evaluating your financial position. It’s not a selling or stalling techniques, it’s just a professional doing their job well so your interests are served!