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
The minimum allowable ratio of down payment to sale price on any loan program. If the minimum is 10%, for example, it means that you must make a down payment of at least $10,000 on a ...
A loan with no down payment. ...
A mortgage on which the borrower gives up a share in future price appreciation in exchange for a lower interest rate and/or interest deferral. SAM's in the private market had a brief ...
A mortgage broker who sets a fee for services, in writing, at the outset of the transaction and acts as the borrower's agent in shopping for the best deal. Customers of UMBs pay the ...
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 letter from a lender verifying that the price and other terms of a loan have been locked. Borrowers who lock through a mortgage broker should always demand to see the lock commitment ...
A lender that holds the loans it originates in its portfolio rather than selling them. ...
Adjustable rate mortgages on which the interest rate is mechanically determined based on the value of an interest rate index. Indexed ARMs are distinguished from Discretionary ARMs, in that ...
The interest rate used in calculating the initial mortgage payment in qualifying a borrower. The rate used in qualifying borrowers may or may not be the initial rate on the mortgage. On ...
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