Q: First off, let me say thanks for all you and your team do in helping so many people across the country!
We are refinancing and gave our current lender (one of your so-called “big box lenders”) a shot.
He took our application, said our credit scores were off the charts great and then offered us a 15-year loan for 4.375, when the same loans are going for way below 4 percent.
I told him we would not even consider anything above 3.50 to 3.75 percent, and he said that that he had no knowledge of interest rates ever reaching that level and then said that his company always offers the best interest rates.
I told the loan officer to call me back tomorrow when he had the good faith he could e-mail me. In the meantime, I told my better half that it’s time to move to someone who has had some oxygen hit their brain lately, but she thinks it is better to give him more time.
What do you think?
A: I’d move on. Your lender’s quote is telling me that for whatever reason, the company is not that interested in your business. If you jump at a loan that is this far above the going rate, then they’ll do it, but that rate is about a half point or more higher than it should be with top credit scores, plenty of equity and enough cash to close.
In any case, you shouldn’t only be looking at one lender when it comes to refinance. As I’ve often said, you should speak to four or five lenders, including a big national bank (that would be your current lender), a mortgage broker, local lender (like a small, local bank), a credit union (if you belong to one and can join one) and then an Internet lender.
Until you’ve thoroughly perused what’s on the market, you won’t know what you can get. And, believe it or not, mortgage lenders respond well to competition, so simply by mentioning that so-and-so gave you a better offer will get you further than simply saying, “We won’t look at anything over 3.5 percent.”
You should also check out some competing “big box lenders.” You might find their rates are better. And, check out BankRate.com for an idea of whom to call. Just remember that the cheapest lenders may not be completely legitimate or may have additional, or hidden, fees that compensate them for their teaser rate.
Good luck, and let me know what happens. And, by the way, last week I closed on a 15-year at 3.75 percent. This week, mortgage interest rates once again hit an all-time record low, so you should be able to find something.
Update: I received another email from this correspondent telling me he had called a couple of other lenders and received an offer for a 15-year loan at 3.50 percent. He’s taking it.