Sometimes other lenders (usually big banks) buy the market and quote very low rates. But, more often than not, many loan officers misquote rates b/c they do not have all of the necessary information, and they are trying to lure in borrowers any way they can.** This is why we now request rate-quotes in writing before we try to match a rate. **I should note here that this is partly why nobody at JVM is on “commission;” it ensures that no clients are ever misled with desperate attempts to garner more business.
There are numerous factors that affect mortgage rates, including:
1) Credit Scores – credit scores can affect rates by as much as 1/2 percent;
2) Loan-to-value (LTV) ratios – moving from 75% to 80% LTV, for example, can increase a rate by 1/8 to 1/2 percent depending on credit score;
3) Property Type – for example, condo loans with LTVs over 75% always have higher rates; and
4) Lock Periods – the shorter the lock period, the lower the rate. Some on-line lenders quote only “15 day locks” that cannot be honored until the loan is 100% approved and ready for docs.
Lastly – if a lender does have all the facts correct and is quoting a low rate, we also encourage borrowers to check Yelp reviews. We recently had a borrower almost get sucked in by a “low rate churn and burn” shop in San Francisco until she checked the firm’s Yelp reviews – the average was two stars and all the borrowers complained about shockingly poor service. That borrower is now one of JVM’s many raving fans.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646
