Mortgage Price Quotes
Rates and points quoted by loan providers. You cannot safely assume that mortgage price quotes are always timely, niche-adjusted, complete, or reliable. Timeliness: Most mortgage lenders change their prices daily, generally in the morning after secondary markets open, and sometimes they will change them during the day as well. This is a major problem for shoppers using traditional distribution channels, since prices collected from lender 1 on Monday and from lender 2 on Tuesday will not be comparable if the market has changed in the meantime. Niche-Adjusted: Most mortgage price quotes are based on the most favorable assumptions possible about your niche. Niche-adjusted prices are available from a loan officer by volunteering the information needed to determine the correct price. Usually, the loan officer will ask you to fill out an application in the process, which makes it difficult to shop. The easier way to shop niche-adjusted prices is at Web sites that offer a 'customized' price. To receive it, you must first fill out a form that provides the required information about your deal, but you don't have to apply. Multiple Web sites can be shopped in one sitting. Completeness: Most price quotes consist of rate and points only. They omit fixed-dollar fees, and on ARMs they also omit features that affect the ARM rate after the initial rate period ends. Reliability: A reliable price quote is one that, assuming the market does not change, the loan provider intends to honor when you lock. Some loan providers offer low-ball quotes they have no intention of honoring. The objective is to rope you in. They figure that once you are in the application process, they have a good chance of landing you as a borrower. If you are purchasing a house, the cost of terminating the process with one loan provider and starting again with another becomes increasingly high as you move toward the home closing date. Your bargaining power recedes with the passage of time.
Popular Mortgage Terms
Programs offered by some lenders under which a borrower who is able to secure a grant or gift equal to 2% of the down payment will only have to provide a 3% down payment from their own ...
An interest rate index that is used on some ARMs. ...
Often referred to as a “second mortgage”, a home equity loan is a type of loan where the borrower disposes to the lender its equity to the home as collateral. To ...
A computer-driven process for informing the loan applicant very quickly, sometimes within a few minutes, whether the application will be approved, denied, or forwarded to an underwriter. ...
A borrower who doesn't pay. ...
The largest loan size permitted on a particular loan program. For programs where the loan is targeted for sale to Fannie Mae or Freddie Mac, the maximum will be the largest loan ...
A written document evidencing the lien on a property taken by a lender as security for the repayment of a loan. The term 'mortgage' or 'mortgage loan' is used loosely to refer both to the ...
A borrower who does not meet the underwriting requirements of mainstream lenders. Sub-prime borrowers pay more than prime borrowers and are sometimes taken advantage of. ...
A mortgage that does not meet the purchase requirements of the two federal agencies, Fannie Mae and Freddie Mac, because it is too large or for other reasons, such as poor credit or ...
Have a question or comment?
We're here to help.