Rates on the rise!
February 19, 2022
Don't let rising rates catch you off guard. Here is what you need to know and how to avoid costly unknowns.
Yes, rates have been steeply rising since mid-January this year. This was not a surprise for educated mortgage professionals, but may have caught many by surprise that are newer to the industry, as well as home shoppers or homeowners considering refinance.
What does this mean and what do you do?
1. Don't make the mistake of just shopping for the lowest rate, especially online. Most often this will result in much higher costs in discount points or more of a bargain-basement type of lender who could put your entire process in jeopardy. There are countless experiences of closing delays, bait-and-switch and even litigation for shortcuts in qualifying that put you, the borrower, at risk. Red flags: super high tech, low human touch "low rate-online-call center" types of mortgage operations, and often missing fees on their initial estimates. Before you know it, you are down the assembly line of scripted call center "headset jockeys" that perform more like order-takers than strategic advisors and educators.
2. Don't blindly accept a higher rate because it comes from a local office or outside the mortgage model (explained in the first point). This goes for fees as well. As rates increase, some companies have to build in cost in other ways, like charging processing fees, docs prep fees or other types of loan origination fees that enable them to quote a lower rate. You likely won't know if they don't provide full transparency, or are not asking about "section A- loan costs". It's a great opportunity to work with an independent broker who can shop many wholesale options for you, because they typically have less overhead costs, transparency in commissions and fees resulting in better options for you, the borrower.
3. Ensure that your advisor is planning with you for the future - not just making a loan for today. The future has potential that should also be considered in today's planning. Most homeowners do not keep their same mortgage loan for a full 30 years, but obtain a 30-year fixed rate mortgage. How you structure your loan should take the future into account – relating to both the industry trajectory and your potential plans.
4. Don't forgo the idea of a refinance: just because a refinance may not lower your mortgage rate doesn't mean there won't be a benefit. There are multiple wise options for a refinance that stretch beyond lowering the rate.
Your loan needs, structure and strategy are as unique as your fingerprint. Your guidance, education and empowerment during the process should be the same. Want to know more? Let's work together! Alysha Boles – Mortgage Strategy Advisor for the Navigate Lending Team – is a licensed loan officer, personally serving California and Texas, and nationwide as a team.
You can contact Alysha Boles at (661) 858–7214, or visit http://www.advisoralysha.com. See her ad on this page.