How We Get Our Low Rates

With home prices at historic highs, it is essential for buyer to get the lowest mortgage rate possible. Getting a low mortgage rate will help you qualify for more home, give you a lower monthly payment, and save you thousands of dollars over the long-term.

If you search online, you’ll see millions of articles about how to get a lower mortgage rate. A vast majority of the information is the same, and to make an article appear unique a writer will give an article a different focus on include/exclude the same base recommendations. Those recommendations are typically:

1. Shop around for the best rate
2. Improve your credit score
3. Choose the loan that’s best for your situation
4. Buying down the rate
5. Locking in a rate
6. Make a down payment
7. Shorten your loan term
8. Pay down your existing debts

Some of the articles even suggest: wait for it – making more money. Why didn’t we think of that? And while the information is accurate, it’s not anything new or complex (see the afore mentioned tip).

So how can you get a lower mortgage rate?

The first step to getting a lower mortgage rate is to shop around. This is the #1 tip across just about every article. There are numerous lenders offering competitive rates, so it pays to compare. But don’t just focus on the rate, also pay attention to the fees charged by each lender. Some lenders will charge higher origination fees or points to be paid at closing.

This is where we come in. Shopping around for a low mortgage rate means wither working with Six Pillar Lending or contacting dozens of lenders, going through the process of giving them your information, telling the same story over and over again, giving them your financial information, and generally taking up a ton of your time. We can contact dozens of lenders with a few keystrokes, get the lowest rates, compare fees, and find promotions which may lead to further lower rates. We’re delivering our clients rates anywhere between 0.125% better to 1% better.

The Value of a Low Mortgage Rate

For a mortgage of $300,000, the difference between paying 7% and 6.5% is about $100/month and $35,894 over the course of a 30-year mortgage. On a $500,000 mortgage the difference is $167/month and $59,832 over the course of a 30-year mortgage.

If you were to take that $167/month and invest it into the stock market each month, you would have about $225,000 given the average rate of return (7.5% annual return). Who among us couldn’t use an extra $260K-$285K when its time to retire?

Don’t Forget About the Fees

Many of the very large mortgage companies and banks (think of spaceship and stage coaches) show their rates on their websites, but you absolutely must read the find print. All of the large competitors we monitor may charge origination fees anywhere between $1000 and 1 Point (1% of the mortgage amount due at closing) as well as Points to buy down the interest rate.

This is why the Federal Government now mandates that everyone offering credit must display the APR (interest rate plus fees). The bigger the difference between the Interest Rate and APR, the more fees are included.

We feel like this “fine print” is misleading and makes it difficult for borrowers to compare the cost of a mortgage across lenders. We simply don’t do it and make sure borrowers are clear about fees included in an APR.

Why Using Six Pillar Lending Saves Borrowers Money

Simply put: we find better rates for our clients, we charge lower fees, and we advise on multiple scenarios to give our clients options. All of these things add up to saving our borrowers tens of thousands of dollars over the course of their mortgages.

Contact a mortgage professional today to get an accurate, easy-to-understand and compare, personalized rate quote.