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How To Find The Best Mortgage Rates — 3 Tools You Need - YouTube
Channel: Win The House You Love
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hey kyle here with winthhouseylove.com
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in this video i'm going to show you
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three tools you can use to estimate your
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interest rate before you apply for
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mortgage and so you can have peace of
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mind knowing that you got the best
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possible interest rate instead of
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getting ripped off for that feeling of
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getting ripped off when you don't really
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know
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if the interest rate you got is good and
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mortgage rates can be pretty secretive
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lenders usually don't show you their
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daily rates and when you do see rates
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online they're often kind of too good to
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be true there's a ton of companies that
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dangle low rates to entice you and then
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you apply and you find out that that's
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not true at all and it makes sense why
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lenders don't often show their rates up
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front it's because more mortgage
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interest rates depend on a bunch of
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different factors based on your
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situation so for instance you have some
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external factors
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so you have things like what's happening
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currently in the market so what's
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happening with stocks what's happening
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with bonds what's happening just in the
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economy in general what's happening with
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inflation so as inflation increases so
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do mortgage interest rates and then also
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the lender that you apply with each
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lender is going to have a different
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structure of what their rates look like
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so you might apply with one lender who
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has lower rates than another lender who
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might have slightly higher rates
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also based on your situation things like
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your credit score the lower your credit
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score the higher interest rate you're
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going to get the higher credit score you
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have the lower interest rate you're
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going to get your loan to value ratio so
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this is things like how much money did
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you put down that can change your
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interest rate that type of loan is it
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conventional fha va uh at usda the loan
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term is it a 15 year loan is it a 30
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year loan um the occupancy so you're
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going to live in the home or it's going
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to be an investment or a second home and
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then if it's a fixed versus an
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adjustable rate so there's all these
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different things that impact your
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mortgage interest rate which makes sense
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why lenders normally aren't going to
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show those up front
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the problem is
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since mortgage rates are tailored to you
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and lenders don't show you them often
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it's difficult to estimate okay what
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would my interest rate be what's a good
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interest rate because otherwise you get
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a rate from somebody and you're like i
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don't even know if this is good am i
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getting ripped off is this
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is this what i should be getting and so
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i want to introduce you to a couple
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tools to help clarify this a little bit
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first of all this link is going to be in
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the description this is fetty ma freddie
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mac's mortgage interest rate survey
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and so what they do is they survey
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lenders to see what the average rates
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are on conforming conventional
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loans
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the only issue with this is it's done as
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a survey so it's basically self-reported
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by lenders and it tends to lag behind
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because it's usually done once a week
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and so the issue here is it's not always
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super accurate however these are most of
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the time the rates that you're going to
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see in the news when they're talking
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about interest rates in the news they
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usually use this freddie mac survey so
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we can see right now it's
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3.05 percent for a 15-year it's 2.3 and
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for a 5-1 arm it's 2.37 so this is an
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okay indicator but a better one for you
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um is i have one on my website if you go
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to win the house you love dot com slash
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rates what this will then do
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is show you the rates not just for
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conventional loans but for other
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different types of loans as well what i
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like about this tool and the reason why
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i've used this kind of data is because
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it doesn't pull just based off the
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survey once a week it's actually
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updating based on actual mortgage rate
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locks that are happening that are
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actually being given to clients from a
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variety of lenders and then you can see
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how all of this is being put together on
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my website again it's a win the house
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you love dot com slash rates and the
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link is in the description if you want
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to look at that but we can see
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this is quite a bit different
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3.05 versus
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3.345
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and what i've found is pulling this data
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tends to be more accurate than just the
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freddie mac numbers you also have jumbo
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loans in here fha va usda and conforming
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for a 15-year as well
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in here you also have a chart for
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what the interest rate will look like
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depending on your fico score and how
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much you're putting down ltv is just
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loan to value it's the opposite of your
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down payment so 5 down is a 95 ltv 10
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down is a 90 ltv
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and then it also shows the trend of
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rates as well and you can see these with
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the different types of loans and we can
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look at a bigger scale
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if we want to
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so this is going to be a really good
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tool here to get an estimate of okay if
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i'm getting a let's say a 30-year
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conventional loan which for most people
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that's going to be true you're going to
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be expecting around 3.345
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at the moment
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now if we want to dig a little bit
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deeper we can go into the cfpb rate
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checker tool
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and link is in the description for this
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as well what i really like about this is
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it allows you to put in your state and
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your unique situation and it's going to
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show you on average what other people
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are seeing in your area for interest
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rates so first we
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choose our credit score range so let's
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say we're at a 740 to 759
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and let's say we're looking in we will
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go to
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let's say california
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for home price let's put in uh six
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hundred thousand dollars for now
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and let's say we're doing five percent
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down
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and we'll choose just a general county
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here
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of course it's not going to work while
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we're doing this is it let's see
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there we go
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uh let's say we're doing five percent
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down so thirty thousand dollars down
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fixed rate thirty year we'll do
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conforming jumbo loan here
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and so showing us that in california
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most lenders in our data are offering
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rates at or below
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3.25
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so then this is a really good estimate
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that you can use in online calculators
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to see what your payment might be
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but then also if you do apply for a
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mortgage and you're seeing maybe you
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have this exact situation but you're
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getting a quote for 3.625
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this might be interesting to give you a
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note of okay maybe i need to shop with a
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couple more lenders to see if i can get
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somewhere closer to this 3.25 that most
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people are getting or i can ask my loan
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officer could you help me understand why
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is this higher than maybe what the
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average would be for people in this
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unique situation and when you do talk to
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your loan officer keep in mind that the
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rate that you get
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isn't the only rate that you have the
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option of
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usually loan officers are going to show
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you one rate but there are actually rate
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charts on the back and you can actually
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choose your interest rate so this is how
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this works let's run through a quick
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example of let's say we're buying a five
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hundred thousand dollar home with twenty
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five thousand dollars down so for four
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hundred seventy five thousand dollars
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and if this isn't your situation that's
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perfectly fine this will still apply to
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you
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so
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what i was talking about interest rates
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it's not just one number that you get
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you're actually you actually have a rate
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chart so there's various different rates
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and they all have either a point cost
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or a credit
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okay and so think of points like prepaid
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interest it doesn't work exactly like
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that but think of it very similarly
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where you can get a lower interest rate
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and pay money up front or you can get a
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higher interest rate and potentially get
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credit towards your closing costs so for
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instance in this scenario what most loan
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officers would do
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is they would see okay
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3.2 interest rate
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is the closest to zero dollars and
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points zero dollars in extra costs
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this is usually what a loan officer
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might show to a client and say we're
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going to offer you 3.2 percent
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but
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you could get a rate of 3.15 percent for
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fifteen hundred dollars
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or you could get a rate of three percent
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for forty two hundred dollars
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so see we're paying down the interest
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rate
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with what are called points so
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everything read here
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is a point and then here in the green
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these are credits these would actually
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offset your closing costs so in the same
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way if a loan officer says your interest
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rate's 3.2 percent
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if you want some extra credit you could
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talk to that loan officer and say
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actually could we look at a higher
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interest rate so we could get credit
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towards our closing costs so 3.5 percent
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might give us 5 5200 in credit
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so if our total cash to close the money
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that we need for closing let's say it's
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forty thousand dollars
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we could reduce that down to thirty five
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hundred dollars if we increase the rate
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and receive a credit now this is all
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going to depend on what you wanna do how
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long you're in the home and you probably
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wanna talk with a loan officer to get a
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cost analysis long term to see what
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these differences
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look like but especially we can see from
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three percent to three point five
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percent is a difference in a hundred and
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thirty dollars per month in the
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principal and interest payment so
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something we want to keep in mind if
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we're going to increase
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the the rate it's also going to increase
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the payment that we have as well and
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then something interesting to note as
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well as pmi when you do have it on loan
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is going to stay consistent no matter
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what the rate is so the pmi isn't based
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on the interest rate it's always going
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to be the same so when you are looking
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this when you're applying for loans
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keep all these things in mind use the
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cfpb rate checker look at average rates
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to see is this a good deal is this on
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par with what you should be expecting
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and if not that's when you want to talk
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to a loan officer about hey can you help
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me understand why this is different
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and then also ask your loan officer can
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you show me a sample of a couple
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different rates some of the points some
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with credit that ua you can see which
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one's going to work best for you and if
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you want to connect with a helpful loan
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officer who's going to help guide you
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through this process you can go to
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windhouseylove.com referral and i
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connect you with a helpful loan officer
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