Expert firefighter Red Adair once said, “If you think the cost of professional is expensive, wait until you hire an amateur.” This adage has been used in many examples. However, in the mortgage industry this message is exceptionally true.

When shopping for a mortgage, there is far more to consider than interest rate. Like the price of a stock, mortgage rates can change from minute to minute. A rate quote provided at 10:00a.m. can be null and void by 10:15 a.m. This can make one lender appear to offer higher rates when in fact the difference is only a change in the market.

What to look for in a Lender?

Three of the most important qualities to look for in a lender are experience, advice and life-long relationships.

Experience - This is easy to measure by asking the following questions: How long have you been in the business? And, “How many mortgage loans have you closed?” The higher the volume lenders tend to have the best systems and processes that ensure accurate and efficient transactions.

Advice - An advisor by definition is a leader. If a loan officer is quoting a rate and simply following your direction, you are working with an order taker, not an advisor. If the lender does not offer any additional insight or value, that is an indication of a lack of expertise and knowledge.

Life-Long Relationships - An advisor’s role stretched well beyond the close of a transaction. A true Mortgage Advisor will have an intentional system to systematically ensure you are ALWAYS in the best mortgage loan based on the market and your personal situation. The cheapest rate on the wrong strategy can cost you thousands in the long urn. Changing markets and Annual Mortgage Reviews can provide opportunities to reduce the amount of interest you pay over time, which allows you to increase your focus on wealth creation and building investment assets.

The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. Knowing how to shop for a lender can make the difference between working with an amateur who serves as an order taker vs. a professional lender that provides meaningful advice. A Professional Mortgage Advisor will save you thousands of dollars, and provide you with a peace of mind knowing that your home loan is always properly structured. To experience the power of advice and care, email me at mike@citycreekmortgage.com or call my office at 801-501-7950 to arrange for a fifteen minute mortgage review. In addition, you may also choose to fill out the simple form below and we will be in touch with you as soon as possible.

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I can’t think of an easier year to predict the direction of interest rates than 2010. It is safe to say that mortgage rates will be higher this year than they were in 2009. Unfortunately for homeowners and the real estate markets, the days of 4.5% 30 year fixed rate mortgage cannot last forever.

In November of 2008, the Federal Reserve allocated $1.25 trillion towards the purchase of Mortgage Backed Securities. As of January 15, 2010, $1.137 trillion of this budgeted amount has been spent. By March 31, 2010, the entire $1.25 trillion is schedule to be depleted. Once the Fed steps out of the market, the likelihood of higher rates is probable.

Mortgage rates would have been about 1% higher had the Fed not intervened and purchased Mortgage Backed Securities. On a $200,000 mortgage, it would cost approximately $8,000 to buy down the interest rate by 1%. Essentially, the Fed has paid to buy down the interest rate by 1% for each person who closed a mortgage since the program began. For those who also qualify for the Federal tax credit offered for purchasing a home, a homebuyer borrowing $200,000 will have a total gain of $13,500-$16,000.

While inflation does not appear to be a major concern right now, the fear is that the massive amount of money the government is injecting into the economy will eventually lead to higher rates of inflation. Inflation is the arch enemy to bonds, and leads to higher mortgage rates. Given that the government has spent literally trillions of dollars stimulating our economy, they may be slow to increase the Fed Funds Rate to counter the growth of inflation. Once inflation takes hold, it can be difficult to contain. This would lead to aggressive interest rate hikes by the Fed to attempt to keep it at bay.

As interest rates move higher in 2010, there will be times when rates are more favorable than others. Mortgage interest rates do not move in a straight line. Therefore, although the trend will be for higher rates, there will still be opportunities to secure lower rates along the way. Given that extremely low rates are still available, right now is an excellent time for a mortgage review. Call my office to arrange a fifteen minute phone call so that we can review your situation and see if there are opportunities to save money. If you are considering purchasing a home, you may want to act soon before the tax incentives expire and mortgage rates increase much higher.