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The Big Picture

Every buyer I have every spoken with is focused on either interest rate or closing cost, sometimes both (Sellers that become buyers when they sell their existing home do the same thing). I suspect the reason for this is all of the gurus on late night TV selling some get rich program says this is what to do. If only it were that simple.

Another source could be all of the garbage online about interest rates. Here is the truth on the lead generation web sites, they advertise extremely low rates and they do not even make mortgage loans! They try to sell your contact information to the highest bidder. I know how this works because I get calls and emails from them every single day.

The reality is almost all of the mortgage money comes from the same place. Major players should all be in the same range on both rate and closing cost. Do not misunderstand what I am saying, rates and costs are important. However, they are peanuts compared to the real issues. There are two much larger topics that should be the focal points.

Getting the Job Done.  The interest rate could be ZERO and have NO CLOSING COSTS and it would not matter if the deal does not close! What is most important is knowing upfront if there are any issues and the extent of the problem. Not closing on time could loose the rate lock and this could be horrible if rates rise during the process. Or worse, I have arranged loans for clients that never closed because the buyer on their existing home was turned down by another lender. There are buyers out there every day with bogus pre-approval letters because they did not fully disclose everything to the lender or never completed the initial loan application.

The second topic is a little harder to define, I call it The Island Theory. In my world no loan is an island. I can not tell you how many times I have spoken to a prospect that is worried about a few dollars in closing cost on the proposed mortgage and yet have an existing debt structure that is absolutely horrible.

Not focusing on these items could cost tens of thousands of dollars; I have helped individual clients save as much as $50,000 by simply changing debt structure.

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