The biggest mistake people make when looking for a mortgage.

One of the biggest mistakes mortgage shoppers make is selecting a mortgage professional without asking them any questions about themselves.  Whether you are dealing with a mortgage broker, or the mortgage specialist at your bank, it is important that you know you are dealing with someone who has a deep knowledge of the industry, and who is going to put your needs over their own (or the bank they work for).

You want to be dealing with a professional who is knowledgeable and going to take the time to listen to your needs and present your options to you based on your goals. As your mortgage is an important decision, make sure you are dealing with a professional that you feel comfortable with who is competent and can get your mortgage closed with as little stress to you as possible.

I had a client who left me to go to their bank, even though it was at a higher rate. They said that the specialist at the bank was telling them that they didn't need to have all the documents I was asking for and that they needed next to nothing. I tried to explain to them that the bank was still going to need all the same documents and that they just haven't asked for them yet. The clients didn't listen to me and went with their bank. I heard through my referral source that they were scrambling to come up with the documents the day before closing, which was when the bank rep starting asking for them. As a result, their home purchase ended up closing late, and the client incurred a lot of unnecessary stress.

My point is, competence is hugely important. Always ask questions before choosing someone to deal with.  One of the biggest mistakes someone can make is choosing a mortgage professional based on rate alone. It doesn't matter if you are going through a mortgage broker or through the mortgage specialist at a big bank.  Make sure you ask a lot of questions to ensure you feel comfortable with the individual who is handling your mortgage.  Some good questions to ask:

1.  How long have you been doing this for?

I would look for someone who has been in the business full-time for at least three years.  If they have been doing it less than that, then you may want to ask a few more questions.  You can also ask how many mortgages they have closed.  If it is less than 100, I would look for alternatives.

2.  Do you do this full or part time?

Don’t deal with anyone who is in the business part time. You want to ensure the person you are working with is committed to their profession and their mind is on YOU, and not on their primary income source.  It is also very unlikely that a part-timer would have that much experience.  They also may not be as available as you would like them to be.

3. Do you have any references or testimonials?

It is always good to know that the professional you choose has a history of satisfied clients.  If they have done a good job for their clients in the past, there is a better chance that they will do a great job for you as well.

4. What kind of education or licensing do you have?

Some professionals will have more education or training than others. Find out how well the person you are dealing with is trained before proceeding.

5. How easy are you to get a hold of? How quickly do you return calls or emails?

There are going to be times when you have questions, and you are going to want to have them answered quickly. 

6. What hours are you available?

It can be helpful to know that the person you are dealing with is can be flexible and is willing to work with YOUR schedule, not theirs.

7. How do you get most of your business?

Ideally, most of their business should come from referrals.  You want to know that their past clients are happy enough with their services that they are referring them to their friends and family.

8. How are fixed mortgage rates determined?

This is simply a question to gauge their competence level and is something that any quality mortgage professional will know right away.  If they can’t answer this, or if they have to ‘get back to you’, then I would move on to the next person.  (The answer is bond yields.)

Hope this is found to be helpful.

Just how low can fixed mortgage rates get?

The only thing more exciting than buying a new home is knowing that you were given a super low mortgage rate, and the only thing that can add to that excitement is knowing that they may be coming down even further.

Bond yields are what fixed mortgage rates are determined by, and after seeing some large increases to the yields throughout the month of August and early September, we saw fixed mortgage rates rise with some lenders.   That trend has reversed over the past few weeks, putting downward pressure on mortgage rates.    

While this trend has already encouraged some mortgage lenders to drop their rates, we can expect to see some further drops if the trend continues.

Right now, you can still get a 5 year fixed mortgage as low as 2.99%. Possibly even lower if you know the right people (wink wink), but I am confident we will start seeing some rates even lower than this over the next week to two weeks. Even at 2.99% for a 5 year fixed can be placed into the 'ridiculous' category given just how low it is by historical standards. The lowest I have been able to offer in the past was 2.79%. Let's see if the new trend can bring us back into that ballpark.