#1 mistake when searching "Mortgage Rates Today"
The #1 mistake consumers make with the widely-searched term “mortgage rates today” is not knowing how to read the fine print and the multiple factors associated with determining accurate mortgage rates. The most deceptive advertised mortgage rates are either missing clear and conspicuous disclosures of the terms or have disclosures that require a very mortgage savvy person to understand.
For instance, some of the biggest online lenders advertise the lowest rate - but only based on very low loan-to-value and includes paying multiple discount points. The fact is, most consumers don’t want to pay discount points. The cost associated with recuperating points with rates takes a long time to justify the benefits, and some people just don't have the money. Another thing to consider is that mortgage rates today are subject to multiple criteria: Exact credit score, Loan amount, Loan-to-value, Purchase or refinance transaction, With and without cash out and Type of property.
Here are two categories of the type of companies that advertise mortgage rates to hook customers into completing an application (which eventually results in bait-and-switch tactics):
BIG Mortgage Lenders - The BIG online mortgage lenders with highly recognized names that sponsor the Superbowl and other major sporting events. When it comes to lowest mortgage rates it’s not like a car dealership that gets better pricing based on volume. Pricing is purely based on overhead and cost of acquisition. Often times, smaller mortgage brokers undercut these big lenders by a quarter to a half a percent when comparing same closing costs because they don’t have hundreds of employees or million-dollar advertising costs.
Lead generation websites with big brand names: These websites are very deceptive and unregulated since they are not licensed mortgage companies and will do anything to get consumers to complete a form. They will advertise 15 year mortgage rates or adjustable mortgage rates with the idea that consumers assume it's a 30 year fixed rate without any discount points. The truth in lending act clearly sets out guidelines mortgage lenders are supposed to follow when advertising rates to consumers. However, these lead generation websites have zero understanding of the law and have only one goal in mind: get consumers to complete an application so they can sell your information over and over which will result in you getting slammed with telemarketers.
Do yourself a favor and instead of searching “mortgage rates today”, search for the best local mortgage companies, mortgage lenders or mortgage brokers. Interview them and read their reviews. Each local market has hundreds of mortgage companies and so there's no reason to try and get a mortgage from an out of state lender that's just a call center full of highly motivated sales people. Just think about this: Would you invest money with a financial adviser over the phone, or would you rather deal with a local person that you can meet with face to face?
It's your financial future at stake, your social security number and your identity that you're sharing. Make sure you know where your information is going and who you're giving it to.
I’m Shahram Sondi (NMLS id: 186790), principal broker and president of Mortgage Expert, Inc., a Florida licensed mortgage broker. As a consumer advocate, I am constantly working to educate consumers on making good financial decisions. I have been serving the Central Florida market with experience and integrity since 2001. Tell me what you’re looking for, and we will personally present you with the lowest available mortgage rate today based on your desired mortgage type and term.