Many people ask us… “How does somebody get the very best, lowest rate?” Or "How does one person get a lower rate than another?”
There’s really one answer:"Leverage".
This is why it’s difficult to answer up front "what rate can you get me?”when we don’t know all of the details to get us the best leverage.
The reason being, it all depends on what leverage can be used to bring the rate even lower. One bank does not beat another bank by a big 1.00%, but usually just .10%. For example, how can I get my 2.99% down to 2.89%, or even 2.79%?
Here are a few examples that we use as leverage to bring the rate down. Have you ever heard the term Hedge the Rate? Do you know how, when you get a pre-approval, the bank tells you "okay, we now have your rate held for 120 days, so if the rates were to increase, we already have your rate held, so your rate will not go up within the 120 days". Make sense?… Now let's think about this. The bank is actually paying money to hold your spot. So if this bank just met you and you end up buying and closing a house within 30 days what happens with your spot? That means the bank would not have to pay to hedge your deal for 120 days right? This is what the bank would consider a "quick turn around” and with that kind of leverage, we could bring your rate down .10%, where the bank may not.
Also think about efficiency. With a bank they first collect all of your personal information, such as where you work, where you live, your date of birth etc. The bank or underwriter looks at that information, and sends back a "pre-approval". Then a week later they say, “We need some more employment documentation”. A week after they want to run your credit score, then to meet with you after you have chosen a property. Then you send them your offer and MLS listing. So, let's think about this. This has now been four or five different times that an underwriter has had to open your file, and truly put hours of work into your deal.
At Mortgage Teacher, we streamline this process and increase efficiency. We do all of this work, and put it all in front of the banks in one shot. Basically our banks work on our files for as little as 15 minutes, they call the employer from the letter, and then the deal is complete, ready to fund.
These efficiencies help us to bring the rate down even further for our clients and you.