Broker Know That You Are Paying Attention To The Bond Market.
Q: How about this: pay attention to the bond market, and let the broker know that you are paying attention to the bond market. If the broker is honest, then you might get nothing more than a few extra conversations about the bond market. If the broker is a sleaze, then s/he may be deterred from trying to falsely tell you that "rates just went up", because you can kind of figure out whether that is true by looking at the bond market.
A: Usually you can call the broker and ask what the rate for the day is before you lock in. That isn't a sure bet either. Once my wife called in, and found out what the rate for the day was. We decided that it was low enough so we called in and locked at that day's rate. Later, we got a call at about 6:00pm that evening. It was the lady from the mortgage broker, "I'm so sorry but I didn't get your rate locked in today. I can lock it in tomorrow for you at tomorrow's rate." Needless to say, the rate never got as low as it had been on the day that she conveniently never got around to locking it in. have frequently been told by mortgage brokers, particularly the company that I dealt with in the above-mentioned incident that since they sell the loan on the secondary market, they don't actually collect the interest. So, they try to tell you, it doesn't help or hurt them to give you a high or low rate. THIS IS A MISREPRESENTATION ON THEIR PART. As you so clearly point out, the higher the interest rate on the note, the higher the note's selling price on the secondary market. If they try to tell you that they aren't making any money by jacking up the interest rate, you are being deceived. I have been told by an individual who has worked in the mortgage brokering business that sometimes the broker will bump the rate up by a quarter or a half percent over the lenders rate. This translates directly into additional profit for him. What you are saying is true, generally a broker isn't going to let you lock in until you've paid some sort of fee up front (about $300 in my area). But that doesn't mean that you are married to the broker. By all means keep on searching even though you've paid the up front money. If they believe that you are about to go somewhere else it can be pretty amazing the way that they can change interest rates and fees. In my area most brokers will match a competitor's rates and fees. If you get one that won't, and the difference is substantial, then walk. An extra $300 might be worth the money if you can secure a loan with a lower interest rate. Chances are, if the company believes that you're serious about jumping ship, that they'll match the terms of a competitor's loan rather than loose you. This is because they really don't make any money off of the $300 up front money. The $300 normally goes for a credit report and an appraisal. The mortgage broker makes most