Here are four simple questions your lender absolutely must be able to answer correctly. If they do not know the answers... run... don't walk... run... to a lender that does!

1. What are mortgage interest rates based on? The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.

2. What is the next Economic Report or event that could cause interest rate movement? A professional lender will have this at their finger tips.

3. When Greenspan and the Fed "change rates", what does this mean ... and what impact does this have on mortgage interest rates? The answer may surprise you. When the Fed makes a move, they are changing a rate called the "Fed Funds Rate" . This is a very short term rate that impacts credit cards, credit lines, auto loans, and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets. For more information, just give us a call.

4. What is happening in the market today and what do you see in the near future?
If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking to someone who is still reading last week's newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who was only able to reference yesterday's paper to tell you how a stock traded, but has no idea what the movement looks like at the present time or which market conditions could cause changes in the future?
No way!