Aaron Whybrow breaks down mortgage rate shopping: for purchases, a slightly higher rate from a fast lender beats the lowest rate from a slow one. For refinances, you have time to chase the sharpest rates. He shares a client who closed a refinance in 10 days internally.
So you want the sharpest rate in the market. Hey, it's Aaron from Diagnostics and Finance. Couple of things with the sharpest rate. Number one, are you purchasing or are you refinancing? Let's take the purchase for example. If you want the really sharpest rate on the market and it's not the biggest bank in the world, say it's a smaller non bank and they've got this really sharp deal at the moment, may not be the best timing for your purchase to go through there. And the only reason is it's not that I'm trying to prevent you from getting the sharpest rate, it may be the timing. If you have entered into a contract and you've got a five day, ten day cooling off period and this particular bank has a 20 day wait for even the first touch to the application, it's probably not going to be the right one for you. We need to get a bank that's going to help you right now and it may not be probably a fairly decent rate at the same time, but it may be maybe 0.1, 0.2 higher than the sharpest rate on the market. But we get a good turnaround and it's fast. Let's take the other one, refinance. If you're refinancing and you want the sharpest rate, the good thing is you've already got a loan in place, you have time and as long as you understand that they're going to pick up the application in 20 days, you're probably not going to be worried too much. I've had a client recently that needed doing refinance so we opted to do it internally to the bank. It had a 10 day turnaround. Once he knew it was a 10 day turnaround, he still had his mortgage, he still had everything, he was still investigating what he was going to do next. We were able to just resubmit it into the same lender that he was already at and just wait the 10 days. So refinances we have the potential of getting, getting those nice sharp rates even if their service times are blown out. But for a purchase, let's just think about where we're up to in the cycle, how much time do we have and how can we get the best rate even if it's not the one that's advertising the sharpest on the market. Hey, it's Aaron from Diagnostics and Finance. Enjoy.
