1. Let’s take this a step further and say that they are same as Michigan’s mortgage rates, Ohio’s mortgage rates, Texas mortgage rates, New Jersey mortgage rates, and the rest of the states that make up the United States of America. One state does not get better mortgage rates than another. There is nothing written in the Constitution that says one state is better than the next so why would we think that one state should get better treatment financially than the next.

2. Mortgage rates come from the stock market and are traded like a commodity on the secondary market. Mortgage companies originate the loans and package them with all of their other loans and sell them for a quick profit. The companies that buy them are usually larger banks that run mutual funds, hedge funds, and their company’s pension. The earn the interest off of what the mortgage makes.

3. There is only one stock market and it is located on Wall Street in New York City. Sure there are other stock exchanges but they focus around the same market in which they use the same numbers.

4. If the stock markets all use the same numbers to calculate everything that they trade then why would they have different mortgage rates to offer to a home owner? The answer is that they do not. Mortgage rates typically are based off of the 10 Year Treasury Bond (usually you can take that number and add 2%-3% on top of it to figure out what the going 30 year fixed rate mortgage is).

5. There are some other factors that weigh in on what mortgage rates are going to do. With the mortgage mess continuing on for what seems to be quite awhile the investors say that they are no longer going to purchase mortgage notes unless they get a certain rate of return. During the refi boom years of 2002-2006 every mortgage company out there just wanted to originate the home loan and sell it on the secondary market for a quick profit. How it works is the company that originates the mortgage sells it for a profit of 2%-4% to a larger bank that pays them the full value of the loan plus the premium. An example would be Quicken Loans does a 30 year fixed $100k mortgage for a home owner and then sells it to Citi Mortgage for $102k. Quicken Loans would get $2k in revenue for selling the loan and Citi Mortgage would collect the interest off of the loan until the home is either sold or the home owner refinances.

6. Many people think that they are going to find better mortgage rates if they deal with companies within their state. This is just not the case. On any given day mortgage rates for a normal 30 year fixed rate loan are going to be about .125% higher or lower than the next mortgage lender. Do not spend a lot of time talking to more than 3 mortgage companies because you are just wasting your time.

7. Since it does not matter where you look for interest rates you are free to shop with whatever mortgage company you are going to want to go with. All of the major mortgage lenders can close a home loan in any state regardless if they are located in that state or not. What they do is talk to you over the phone and send all of your application documents to you via fax or email for you to view. If everything is just as you discussed they set up an appraiser for you from your local area who in turns comes to your house and appraises it. The appraiser faxes or emails back the appraisal to the mortgage company. If everything is fine the mortgage lender contacts a title company in your area and has them handle the closing of the loan with you. Many times you can arrange it for them to come right to your house.

8. The only time mortgage rates might be better in your state is if you work with a credit union. Credit Unions are the only lending institution that might be able to give you a better mortgage rate. The reason is that their local mortgage rates favor people that keep their money with them. Some local credit unions and banks can offer you up to .25% less of an interest rate on your mortgage if you open up a savings account or checking account with them.

9. Going back to the stock market, you can see how spending a lot of time trying to find the best deal in your state usually ends up being a waste of time. Mortgage rates are the same in Florida, California, New Jersey, Michigan, Ohio, and the rest of the United States.

10. Knowing that your state is not anymore special than the next state is great information to know. The reason is that if you are serious in refinancing your mortgage or buying a home is to not get so focused on shopping for the best rate. If what you are hearing from all of the different mortgage companies is the same then you should know that you have done your homework and proceed with picking a mortgage company and closing your home loan.

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The Top 10 Reasons Florida Mortgage Rates Are The Same As California Mortgage Rates

1. Let’s say that you are shopping for a interest rate for a mortgage and you get out your Sunday newspaper and go to the real estate section to see what mortgage rates are doing that day. You see some 20 different mortgage companies offering different rates saying that sense they are a local mortgage lender they can give you better rates. This is a lie.

2. Mortgage rates have nothing to do with where your house is located. Mortgage rates do not care where you live to be exact. They just want to know whether or not you are going to give them a new home with a new home loan.

3. Local lenders use this local mortgage rates are better than national mortgage rates thing as a trick for you to get off of your butt and walk into their office instead of you getting on the internet, then the phone and calling up a couple places. They know its hard for you to walk out of an office saying no when everything makes sense. On a phone its easy to just hang up.

4. You can’t blame the mortgage broker or bank because they know that there is a small percentage of people that feel like they are getting a better deal with everything that they buy when they buy it close to home. It’s like living near Detroit and saying that Ford is going to give you a better deal on a new Ford Fusion than somebody who lives in New Mexico just because you live near the Ford’s world headquarters. Business does not operate that way.

5. For those of you that do not know, mortgage rates are determined every day on the stock market. There are a number of factors that go into this but the main one is the 10 Year Treasury Bond. There is no Local 10 Year Treasury Bond. Its the same for everybody.

6. Since all lenders, mortgage brokers, and banks all determine their rates from the same place this let’s us know that the “local mortgage rates” thing is just a marketing strategy.

7. To determine what mortgage rates are going to be for a particular day just go to a major site like CNN, find the 10 year and add 2%-3% on top of that number.

8. Like I said earlier this is not the only factor that goes into finding out what the 30 year fixed rate mortgage is going to be for the day but its close. If you talk to a couple mortgage bankers that day and they tell you less or more than those numbers than their either low balling you or trying to over charge you.

9. Don’t fall for the local mortgage rates ploy and think you are getting a better mortgage rate. Your not. All that you are really doing is supporting your local community.

10. If you want to test out my theory call up a national lender like Countrywide or Quicken Loans. Get their rates for the day and then immediately call your local mortgage broker or bank. You will see that they are relatively the same.

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The Top 10 Reasons Local Mortgage Rates Are A Joke

1. When shopping for mortgage rates the American public has been very misinformed. Many people believe that one company is trying to rip them off while one is trying to give them the best deal of the century. Its so easy to believe this when you hear Lending Tree ads all day on the tv and radio talking about having banks fight over you to give you the best mortgage rate. Since you are not in a big hurry you put your name on 3 or 4 different websites like Lending Tree and Lower My Bills where you will be expecting a phone call from a couple different lenders.

2. Depending on what time of day you put your information on those websites you could literally be called within 15 minutes from somebody from a mortgage company. Typically the larger companies will be the first to call because of agreements with those web sites that they get first crack at selling a new loan because they buy so many leads.

3. Depending on the skill level of the person calling you it could take anywhere from 5 minutes to an hour to find what you are looking for. After the normal greetings the first thing that comes out of your mouth will be “what’s your interest rate.” This is the one thing that mortgage bankers and mortgage brokers hate hearing. They hear it on every call and it gets old because they know how it works. What should be going on after this question is the mortgage officer should say “Well why do you want to refinance your home, we can get into interest rates later. With so many different programs to choose from it would be irresponsible to just quote you a rate when there are so many rates.” This is when you are probably surprised because you thought each company only has one rate. Most mortgage companies have about 20 different kinds of mortgage or loan programs and each come with about 12 different interest rates that day. There is the zero point interest rate (market rate for the day) and then there are rates where you can buy down the rate. The term buying down the interest rate is an option for you to pay money up front (not out of pocket but commonly rolled into the loan) for a lower interest rate. That’s right you have options.

4. A good mortgage banker or mortgage broker will spend the extra time to try to see what it is that you are really trying to achieve financially. Is it home improvements, college tuition, cash out to roll in some debt or are you just trying to save money?

5. You are probably wondering why I am writing so much about this topic in which a simple answer about shopping for mortgage rates would do. You know there’s a catch coming and its going to come from the mortgage banker. If they can tell that you are not really serious about buying a house or refinancing your loan than they might just throw an interest rate at you and see what you do. If after this time of talking the loan is making sense for you and you sound interested the mortgage broker is going to keep you on the phone for as long as they can possibly without even talking about rates or costs or anything. Just them trying to get to know you and build rapport. This is good salesmanship actually so don’t get mad at your mortgage person.

6. So now the mortgage banker turns off the charm and goes into business mode and is ready to ask for your business. If the mortgage person is a good closer he will answer your questions and ask for the business again and again and again. Some companies train their mortgage officers to do this and actually all businesses should. It gets out your real objection to not moving forward. 95% of the time you are not moving forward because of the interest rate and in the back of your mind you know that you are expecting a call from 3-5 more mortgage companies and you know your only gathering information right now.

7. So let’s say this person you were talking to just spent an hour of your time trying to get to know your situation and found a loan that works for you and hits your goals but you do not budge. You tell this mortgage person you are waiting until you get all of the calls and it does not matter how long it takes but your not moving.

8. The reason why you want to shop for mortgage rates in a 24 hour time period is this. To fairly be able to compare rates against competitors you need to get all of that info that day. No waiting til tomorrow or when somebody is supposed to call you back in the morning. What you are doing is making it unfair really on yourself. Now you are going to have to call all of those companies back the next day and get all of their info again. The reason is because mortgage rates move on a daily basis. So what some mortgage company said the day before is not going to be the same thing today (more than likely). Interest rates for mortgages for the most part are based on the 10 year Treasury Bond.

9. What you want to do is be polite to all of these mortgage companies that you are in contact with. The best mortgage companies out there like Countrywide, (just cause they have been in the news for foreclosed homes does not make them bad) Citibank, and Quicken Loans will have all of their programs and mortgage calculators ready and can lock you in on an interest rate and get mortgage documents including a Good Faith Estimate and Interest Rate Disclosure Agreement out to you within the matter of minutes. These documents will provide you with a piece of mind knowing that you have at least taken care of that. If somebody says they will have to call you back tomorrow its probably that they do not value your business or they are a mortgage broker and cannot lock you in on an interest rate. This is important to know. Mortgage brokers can send you documents with an interest rate on it but since they are not the lender those documents are kind of like saying we can hopefully offer you this mortgage if you application is accepted by the real lender doing the loan.

10. Most interest rates that mortgage companies go off of will be updated every morning when the stock market opens. They usually keep them the same through out the day unless something crazy happens on the market. This causes the Chief Financial Officer of the company to not let anybody lock in mortgage rates until things cool down. Also, if you do commit to a lender and they lock you in on an interest rate you are locked into pricing for that day. So you can switch it if you want to higher or lower interest rates. The catch is let’s say you lock in your rate one day and the next day interest rates go down by .25%. The lender that you committed to is not going to tell you this but you are probably still going to receive phone calls from other mortgage companies saying that rates dropped and they can lock you in with a better rate. It’s really all a game and all you can do is hope that you are well informed. Don’t think that mortgage companies want to charge you higher rates. They know you will not go with them if they do. Do some research on mortgage companies before you put your name on one of those sites. There is plenty of free information on major web sites about the best mortgage companies. Get at most 3 banks and call them yourself. Get all of their rates and fees that day. You will probably see that they are all relatively the same. Go with the person who treated you the best and really wanted to know why you wanted a new loan. Shopping for mortgage rates in a day will also save you from the headache of having to answer to a bunch of companies and having piles of Good Faith Estimates that don’t mean anything now because they are a day old. 

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The Top 10 Reasons You Should Shop For Mortgage Rates Within 24 Hours