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The Consumer Benefits of Solid Professional Relationships

MortgageIf you have been paying attention, mortgage rates are great right now.  Several days this week you could have locked a rate below 5%, depending on your scenario.  We haven't seen rates like this in several years. 

So who benefits from these low rates?  This article is not going to get into FICO scores and loan-to-values.  The people who benefit from low rates are primarily clients who have a solid working relationship with a mortgage professional.  Consider this scenario ...

  1. 9:45am: Ratesheets show great pricing on mortgage rates.  Loan officer (L.O.) calls clients that could benefit from these low rates.
  2. 11:15am: Client calls L.O. back to ask questions.  L.O. is on the phone.
  3. 12:03: L.O. calls client back.  Client is out to lunch.
  4. 1:10: Client calls L.O. back.  L.O. is in a meeting with a new client for the next hour and a half.
  5. 2:50: Loan Officer calls client back, and finally gets client on the phone.  At this point, the market hasn't done well on the day and rates go up .25%.  Rates change daily, even several times a day.  In this scenario, EVERYONE loses.

So how can this be avoided?  By having a working relationship with the professionals you surround yourself with, in this case a mortgage professional. Imagine the same scenario above, BUT for each client that the loan officer is working with, there is a target rate/points scenario designated, so that the moment the ratesheet allows, the loan is locked in, in a matter of a few minutes.  Who wins then?  EVERYONE. 

MortgageThere are a few reasons why this scenario isn't more common.  One reason could be that the client doesn't trust the loan officer enough to "commit" to this scenario, even though it is 100% free.  Another reason could be that the loan officer doesn't have this ideal scenario anywhere in his mind, so a pre-emptive strike would be impossible. The relationship in this case can only hope to get lucky.  It has been shown countless times that when the media reports low mortgage rates, it is almost always to late for the consumer to benefit.  Rates have already gone up to where it isn't beneficial to the consumer.

Mortgage professionals are just like realtors, lawyers, accountants, financial planners, etc ... there are tons of mediocre ones out there, some bad, and some really good ones.  Having a network of your own professionals, even as a regular 'ole Joe from Anytown, USA, you can bring about much more financial success for yourself.  By working with such professionals, you create a scenario where financial success for you isn't a flip of the coin.  It is a predetermined decision. It isn't a question of if the right scenario will come about, it is a question of, "Am I ready for that scenario at the drop of a hat?"

by Steve Kappre

Steve Kappre is a Certified Mortgage Planner in New Jersey and can be reached for more information at 856-419-3561 or via his Mortgage Website.

 

Comment balloon 27 commentsStephen Kappre • December 10 2008 07:44AM

Comments

I've seen it only too many times!!

Having a great loan officer behind you is critical to the success of most transactions today.

Great post!

Posted by Gail Szeluga & JoAnna Siminerio, Fostering Community Spirit Through Real Estate (Weichert Realtors - Manalapan - Marlboro) almost 10 years ago

I agree.  It isn't well known that rates continuously change and that having a knowledgeable loan officer looking out for you can save you A LOT of money.  Listen to Steve.

 

Paul Howard

 

Posted by Paul Howard, Paul Howard Realty, 856-488-8444 (Paul Howard, Broker, Paul Howard Realty 856-488-8444) almost 10 years ago

Steve - great article and certainly being in the business I can see the value of having a mortgage professional who has the pulse on the market and can notify you of changes at a moments notice.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 10 years ago

Paul - Thank you for the endorsment

Bill - Not having a LO in touch would be like having a stock broker always on vacation! :)

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 10 years ago

Steve I agree with you completely. In fact I was thinking about this post again last night and it really should be featured. I am flagging it.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 10 years ago

Steve,

With T-Bills at 0%-well, is the government going to pay US to take their bonds?

GIvesw new meaning to the phrase "lock and load"!

Blog on,

Steve

Obeoman

Posted by Obeoman Glade Jones (www.obeo.com) almost 10 years ago

Great post.

Ummmmmmm, so now who is the showoff?  (C'mon!)

Posted by Gail Szeluga & JoAnna Siminerio, Fostering Community Spirit Through Real Estate (Weichert Realtors - Manalapan - Marlboro) almost 10 years ago

This is huge brother.  My first foray into the consumer direct market is AR.  I'm a fiend when it comes to professional relatoinships.  YOur points make sure that all people in real estate have the sun rise for them the next day.  Isn't that the point.  Nice gold star brother.

 

Posted by Larry Bettag, Vice-President of National Production (Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001) almost 10 years ago

Great info on the rates and that timing is everything...more importantly have a professional relationaship with a Mortgage broker...I look forward to getting educated more on the ins and outs of the rate game...

Posted by Tim Ludemann almost 10 years ago
Steve... Wonderful post and a well deserved Gold-Star for you!
Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) almost 10 years ago

Bill G - You are the man! And thanks for commenting on my Trulia post.  Hilarious seeing the consumers with names like "nonrealtor" who just want to bash real estate pros - rather comical. Thanks buddy.

Obeoman - In this market ... only time will tell!

JoAnna - I'm not sure you went to sleep at all last night ..... but I'll be the one to say "I knew her when ..." :-P

Larry - That means a lot from you, because I love your posts. 

Tim - let me know what you want info on, I'll e-mail or post it :)

Richard - I'm just trying to follow in your footsteps, haha.

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 10 years ago

Your welcome Steve! Congrats on the feature.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 10 years ago

how you finance is most often times more critical than the price you pay, having a great loan officer is extremely important , congrats on the fEAture

Posted by James Wexler (wexzilla.com) almost 10 years ago

Steve, so true that the relationships that people have make a big difference in terms of service.  The relationships people have with their realtors and their mortgage professionals are crucial for success.  The scenarios that you discussed are fantastic examples of what you are referring to !  Bill Gassett is the man when he recommends a post to be featured as well !  So congrats on that ! And congrats on the 2 within 24 hours as well !!!  You are rocking !  ~ Chris

Posted by The Somers Team, Real People. Real Dreams. Real Estate. (The Somers Team at RE/MAX Access) almost 10 years ago

James - Very well said.  Over time, proper mortgage planning is FAR more important then rate.

Chris - I'm glad you guys had your time off. I missed you, lol. We'll have to have a Philly area AR party soon :) 

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 10 years ago

Hi Steve,

This is a really insightful post.

I particularly like this, "By having a working relationship with the professionals you surround yourself with, in this case a mortgage professional"

There are always going to be people that go shopping for a "rate" - and I think you can't worry about these people as they will never be "clients".

But as a message to the consumer, the lesson is that it pays to develop long term relationships with reliable professionals - especially in this market.

Posted by Mark MacKenzie almost 10 years ago

Steve, committing to lock in at a target requires a win win by all sides. Sometimes the clients are squishy.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) almost 10 years ago

Mark - perfectly said.

Gary - Very true. I have more clients that won't return email, calls, or the annual mortgage planning worksheets I send out each year. I can see their side - it is hard to find a trustworthy pro to rely on.  BUT, it also doesn't cost them a penny.

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 10 years ago

Great info Steve.  I locked in on an investment property with a great rate.  I had a good relationship with the loan officer and it helped.

Posted by Paddy (Patricia) Pizappi, Real Estate Associate Broker Hudson Valley NY (Better Homes and Gardens Rand Realty) almost 10 years ago

Great Post and great comments.  Thank you

Posted by Mark Watterson, Utah Real Estate almost 10 years ago

Paddy - Well I would hope you would ;-)

Mark - Thanks for stopping by.

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 10 years ago

Steve.... I will agree with many...a strong and trusting relationship is key... very insightful. And maybe something to add... if working with a true professional, they lock your rate in before they can even get a hold of you.. knowing that the market has tanked...that rates will get worse. Or, that they have a plan and permission to do this before it gets to that point, that the loan officer is allowed to lock on their behalf. Kind of like stock brokers on the floor of Wall Street....  they have a set price then buy.  nice job here.

jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago

Jeff - Right on. We realize too that it is also about communication, about setting up this scenario even the very first time you meet them. From the first phone call or meeting, "selling" the next one. Thanks for sharing.

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 10 years ago

I think that trust is a huge factor in this scenario. Next to used car salesmen, loan officers are pretty close to the top of the list of those who are least trusted. That is why the 'team' approach is so important. If the consumer is confident that the loan officer is working FOR them...watching out FOR them...they are more likely to be ready to jump when the loan officer says jump. GREAT STUFF!! ~GBU~

Posted by Elizabeth Nieves, Bilingual Raleigh - Durham North Carolina Real Estate Team (The Elizabeth Nieves Realty Group) almost 10 years ago

Elizabeth - trust is paramount. Often hard, BUT not impossible to build. You are 100% right, a team effort is very beneficial to getting these points across.

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 10 years ago

Thanks, Steve. I appreciate the post! Ultimately we're a team put together to help our client. I believe it's imperative to want to work with the very best. If we do this, we should be fine. If at any time, one of the team members lets the team down, that is grounds for replacement. I know that sounds harsh but, ultimately, it's our client we want to win.

Posted by Paul McFadden, Pest Control, Seattle, WA. (Paratex) almost 10 years ago

I have always told my Loan Officer to just give it to straight. It's really  a simple yes or no. Great post and congratulaions

Posted by Charles Stallions, 800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl. (Charles Stallions Real Estate Services ) almost 10 years ago

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