What Happened To The Rate You Told Me?

Have you had this happen to you? You call a lender to ask what their rates are. Or you look at the newspaper/internet and like the rates you see from a particular lender. Then you go to that lender and the rate is not what you received on the phone or what you saw in the newspaper/internet. What happened, have you been baited then switched?

Almost every lender will advertise a BASE rate, based on certain criteria such as 20% down, single family home and excellent credit. But ALL lenders must follow Loan Level Price Adjustments or LLPAs. These adjustments are determined by factors as: owner versus investor; condo versus single family; down payment combined with credit score, to name a few. Each adjustment may add to the total pricing of the rate. For example, if you are buying a condo and only put 20% down then you would have an adjustment of an additional 0.75 in points versus if you were buying a single family with the same down payment. So, a 4.25% rate for a condo may cost 0.75 points whereas the same rate, 4.25%, would cost 0 points for a single family home.

Depending on your particular situation, the actual rate you get may be very different than the one you saw or were told (in fact, take a look at the very small fine print, it will mention this). And that is not the fault per se for the advertising lenders. Remember, advertising is designed to get you to call. Which brings us to another, related topic: internet lenders.

With consumers keying in on who has the lowest interest rates, it is no surprise that internet lenders are blasting the airwaves to encourage you to apply online. Once you have entered all of your parameters you may once again be presented with a different rate/points than what was advertised. But more importantly you may be missing the analysis and options that only an experienced “live” loan officer can provide. Using the same example above, an experienced loan officer may advise that if you put an additional 5% down then that 0.75 adjustment to the condo pricing goes away.

Sitting down with a live loan officer and relating all the factors in your situation will result in getting an accurate picture of your final rate/points as well as any potential options you may want to consider. PRMG Hawaii is dedicated to providing you with honest answers and complete understanding of the complexities of a mortgage transaction.

Don’t jump at those enticing advertised rates without calling us first!

Since 2001, Paramount Residential Mortgage Group (PRMG) continues to be a leading lender in the mortgage industry. As a privately held mortgage banker and residential home lender, PRMG has successfully helped many borrowers purchase and refinance their homes throughout the United States.