Rate Shopping? Read this FIRST!

(No matter WHO you use, print this page for future reference)

WARNING! INTEREST RATES POSTED ON THE INTERNET AND IN NEWSPAPERS ARE OFTEN MISLEADING AND INACCURATE!

At American Mortgage Consultants, we respect our customers too much to provide them with anything but honest and accurate information. Because of market volatility, rates are often obsolete by the time you see them. Also, rates are based on multiple lending criteria. To provide reliable, accurate rates, we will need to know the following information.

1. The amount of the loan
2. Purchase or refinance
3. Property type (single family, duplex, condo, etc.)
4. Primary home, second home, investment property
5. How long you plan to keep the mortgage
6. Any special circumstances such as relocation, proof of income, credit history

The number one question we receive is, "Please give me your best rate quote". If you choose a lender based solely on the "best rate quote", you're likely to get a big surprise later. There are thousands of lenders out there, but the truth is, mortgage rates, particularly fixed type loans, vary only slightly from company to company. Rates between legitimate companies usually vary no more than 1/8th% for the same overall cost period. Why? Banks, mortgage bankers and mortgage brokers get their funds from the same secondary market sources. Simply put, the cost of money is dictated by these sources, not the actual lender. Further, rates change one or more times a day--just like stocks. The bottom line is that there is no one source that is the cheapest. If one single lender was always the cheapest, everyone would know about it, right? There's always a "catch". Pick a company that's very competitive and that you trust, then go with it.

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What causes mortgage rates to change? Mortgage rates are NOT affected by what Alan Greenspan does, although most people think so. Mortgage rates change primarily on the perception of inflation--that's it. When a piece of economic data shows weakness in the economy, rates tend to fall. The opposite is also true. A tightening labor market, a rise in durable goods orders, the consumer confidence index--rates go up. There are MANY economic indicators and they come up almost every business day. Most people think you shop for a loan like you would for a car. Reading the paper for quotes doesn't work because the information is old by the time you read it. Radio, TV and billboards are not the answer. Any lender, us included, can deliver the same rates. Some lenders tend to have high "junk fees" in exchange for being able to delive lower points or rates. Low or no points with high fees is not a good deal at all, but most borrowers don't ask the right questions and focus ONLY on the rate. This is because junk fees are not tax deductible, whereas points are, making the effective rate even higher under those circumstances. Adding a prepayment penalty can also lower the rate slightly. Again, most borrowers focus only on the rate, not the mathematics. Think MATH! That's what matters. With mortgage money, there are other critical factors to consider such as expected length of stay in your home, tax implications, opportunity cost, cash flow, etc. The real cost of your mortgage is a combination of rate, loan points, other fees, actual terms, and time, not one or the other and only as it applies to you! This is not a 'one size fits all business". Only work with a mortgage company where the mortgage professionals are skilled at the mathematics and can explain it in plain English. Use our Rate Tracker system to be automatically notified when your target mortgage rate is available!

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There is generally only around 1/4% gross profit in mortgage money. That's it! So how can there be a lender at 6.5% when everyone else is at 7% for the same total cost, on the same day? The answer is, there isn't. It doesn't matter how lenders advertise. A rate quote may be for that day only and cannot be locked in. You don't need any special education to start selling mortgages. Having the title of "loan officer" does not automatically mean your good at it. You can easily end up with someone who doesn't return phone calls, or perhaps screws up your loan completely. You've heard the horror stories. We hear several each week and sometimes end up jumping in at the last minute to save someone's transaction. Most home loan applicants fail to shop correctly. The more lenders they talk to, the more they get confused. So, what do you do? Once you weed out the people that are obviously on the high end OR seem to have rates lower than everybody else, choose someone that's competitve and that you trust. Ask for meaningful references such as Realtors, Attorneys or Financial Planners, not just past customers. Don't gamble with something as important as your mortgage. Please take a look at our About Us page, then decide.

Pre-qualify today today using our online application.