6 Easy Steps to Shop for Your Mortgage and Be Successful

After 8 years helping families find the right loan for their needs, I want to tell you how I would shop for a loan if I were no longer in the business. Please note, if a good deal to you in buying a home is saving a couple hundred dollars in closing costs in comparison to another lender's offer of the same interest rate on the same type loan, this message is not for you. You might want to read the book, How Do I REALLY Decide What's Important in Life for Dummies, and then come back to this message. (wink wink) Now back to a more serious note, follow these steps and you will likely be more successful in choosing the right lender.

1. You need to figure out what loan officer you genuinely like the most first. However you come up with your list, get your list of lenders you plan on shopping for your mortgage. Some suggested best ways to derive your list are as follows; referral from a friend, referral from a Realtor, check with your local bank. Now, use your best people skills as you make first contact with each of these contacts at the lenders office (loan officers) to REALLY LISTEN to the "person" that answers your question and not so much the detail of the answer. You want to be a great listener in this first communication to find out who sounds more trusting and compatible with you. Maybe even try to get off the subject of mortgage just a bit. In this first communication, you might ask some mortgage questions to make sure they know their business, but interview them. (this step does not require a face to face appointment, so don't waste their time setting an appointment just yet) Once you've talked to your list of loan officers and decided who you like best, this will be the lender you target as your hopeful transaction coordinator and leader in your financing process. Lets call him your #1.

2. In most cases, when you are buying a home, you will have already gotten to your #1 (your #1 is the chosen/preferred lender) BEFORE you have found a house, because most Realtors won't show you homes on "their dime" unless you can show them you are pre-approved...and they have VERY good reason to make sure you are pre-approved before they take you out as well. Now that you have your #1 selected. You have a goal and you want to put that goal in the responsible hands of your #1. Your goal is to get pre-approved, get comparable offers from your list of lenders, get the answers to all your lending transaction questions answered, and find out what your prospective monthly payment and dollar out of pocket at closing estimates are. Just FYI, the dollar out of pocket at closing is NOT to be used at any point as a detail used in determining what lender you use...do not use a "bottom line" on an estimate sheet from a lender to compare lenders. Schedule a time to meet with your #1, face to face if possible, or at minimum, by phone. Allow your #1 to run a credit report, collect ALL of your income and asset documents to underwrite your loan, and in the end, complete your pre-approval. PLEASE NOTE, YOU HAVE NOT STARTED YOUR "SHOPPING" AND COMPARING COSTS YET!!!

3. At a point in time between meeting with your #1, mentioned above, and before you are ready to make a bid on a home, you need to get some numbers from your list of lenders for shopping purposes. Listen very closely here! You do not need, and you should NOT ask for a Good Faith Estimate, Initial Fee Worksheet, or any other template form that the lender has in his system to come up with the variables you need for shopping at this point. To compare lenders, you need to know 3 things: 1) Interest rate, 2)Points (origination and/or discount), 3) total of lenders fees. So get out a writing pen and paper and ask all three lenders what their total of lender fees are that you will incur by doing business with them, what is the current interest rate for the program that you and your #1 decided was the best loan program for you, and how many points do they charge for that interest rate. Your notes might look like this: $1190 total lender fees, 4.875% interest rate on a 30 yr FHA loan, and 1% origination (point). If you go against my shopping plan and ask for a GFE or Initial Fee Worksheet and think that you'll just pull out what YOU know to be the right fees and variables for shopping a lender, then you open yourself up to trouble. I'm not going to bother with the huge number of ways in which that can be used against you, and if you are not willing to take my advice about this, then it won't matter anyway.

4. Now that you have gathered the necessary numbers to compare your lenders, hopefully your #1 was sitting right "in the mix" with the other lenders. If he was .125% higher in interest rate than your other lenders AND the lender fees and origination were higher, you might need to have a talk with your #1, and if the fees were higher by much, you need to work with #2. There is nothing wrong with paying $200-$400 higher in fees and points for a similar or same interest rate if you are going to enjoy the process more with your #1, have confidence that all is going to go well while you and the family are packing everything you own to move, and your sure that #1's experience and advice is going to get you to your destination smoothly and with less collateral damage costs in the end. You are buying a house after all, and not a car, or a stereo system at a pawn shop...$200-$400 in extra fees and $8-$15 extra a month for a slightly higher interest rate is not a bad sacrifice to pay for comfort in the transaction, and to make sure you do not end up paying collateral damage costs at the end of the transaction because you chose a lesser expert to handle your business. (collateral damage costs may be for example: you don't close on time, so you have to pay $100 a day to your moving company while you wait for your loan to be ready, or your contract needs to be extended because your loan wasn't done in time and the seller wants you to put up more cash to make it worth their waiting on you).

5. At this point, you have compared your lenders by interest rate, lender fee total, and points associated with the offered interest rate. You now should have located a property you want to buy, and have an executed contract on that property. You now have an exact purchase price, and a selected title company in which was selected on the contract in the negotiation. Give your shopping lenders the exact purchase price of the home, and the name and number of the title company that was used (if the number is not on your contract, ask your Realtor for it), and give them a copy of your contract...the contract should tell them if there is a survey fee, and seller contribution and all that. Ask them for a Good Faith Estimate in return and that you will be deciding on locking in the next day or two...whether you are or not (this will keep them honest). The 2010 Good Faith Estimate is designed so that you can easily compare lenders, and if the costs in the Good Faith Estimate end up being higher by fee or rate at closing, the lender will be required by law to "EAT THE DIFFERENCE". When you ask these lenders for their GFE's, they will probably want to know what your credit score is and so forth. They may in most cases need that to give you an accurate estimate on your loan. As long as your credit score is above 700, it more than likely will not hurt you to let them pull their own credit report. They'll need to know your income and asset information too, just like you gave your #1, so you might try and have that in email or fax-able form. If your lender can not get you an estimate in 24 hrs, you really need to think about the availability this lender will have in answering your questions during the process, and therefore thinking about that being a reason to NOT use that lender. If they can not get you an estimate in under 48 hours (assuming normal business hours, not including Saturday and Sunday), you REALLY might think about not using them.

6. Now that you should have all your GFE's from the different lenders, just make sure that the lender you chose as your #1 is close or better than the other offers. You might even just ask your #1 to match it and in turn you would work with him. Lastly, while comparing deals, if any one of the lenders has an estimate where the interest rate is more than .375% better than the others and the costs are similar, be very leery and get additional advice from your Realtor or ask him directly why his rate is so much lower. Lastly, make your decision on whether your #1 can compete so you can work with him, or pick the next best option in line.

If at any point along the way you did not like your #1 anymore and the other options were not good either, find another lender to throw in. If you run into discomfort and can not find a lender you like after trying a variety of lenders, you might suggest taking yourself out of the "equation", and allow yourself to be advised and directed. Controlling personalities end up, in many cases, with 2 outcomes. 1)They end up working with someone willing to let the buyer run the show (inexperienced Loan Officers work with anyone), where in turn the buyer won't "let go of the steering wheel", so the inexperienced buyer leads everyone through a very bumpy ride where the entire process is like running a mile with an anchor on your back, or 2) the buyers expectations are underachieved throughout the entire transaction because they did not allow the expert to set the expectations because they thought they could control the process themselves...even if it is your 3rd or 4th time to buy a home, you have no business setting your own expectations in a loan transaction. Loan officers live a life directly related to how the market moves, and if tracking their income as it goes up and down like a roller coaster from year to year is not enough to tell you how the market changes and how often it changes, listen to the news. That being said, a loan transaction today is very dissimilar from one a year ago.

Best of luck in your home search, and shopping!

Today's Expectations of Interest Rate and Fed's Next Move

First, what are the expectations of the Fed's next move on Prime Rate?
Today around 1:15, the FOMC (Federal Open Market Committee) is meeting and the results are to help estimate their next position on adjusting the Prime Rate. Chances are, there won't be much to expect and the disclosure of information won't REALLY say much to make heads or tails of a right hike.

Moving.com said today, "Tomorrow morning brings us the release of December's Durable Goods Orders. This data helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show a decline in orders of 2.0%. A larger than expected drop would be good news for bonds and mortgage rates." If you decide to follow this, you could Google the terms "December Durable Goods" and see if the decline is more than 2.0%. If it is, that could be could news for rates. If it's not, it should affect rates for the worse by much if at all unless it is much better than expected.

What to expect in mortgage interest rates by end of this week in relation to the stocks and bonds and economic reports...Lastly this week, the December New Home Sales Report is to be out, but it should have a major affect on rates either. On the other hand, if it IS worse than expected, that would couple with the rest of this weeks reports and hopefully more next week to continue building momentum for a bettering mortgage rate market.

Are you trying to decide to lock your loan or not?All signs right now would say to float, or hold off on locking and see what the end of the week brings. If you are finding a benefit in a refinance right now, my advice is to lock Friday or Monday assuming rates are worsened too badly by then and therefore cultivate your gains.

McKinney, Allen, Frisco, Prosper, Plano, and Dallas Insurance Needs...MET for Texas Home Buyers

Today it is more important that ever that you not only find the right price, but also find the right Agent that cares about you and your family like a father would his own. Rodney Mouton, my uncle, has a family and knows what it is like to insure the people he needs in life...his family. Give Rodney a call and you will see that after finding you the right company with the lowest rate, he will ask you the thought provoking questions that will help you decide if your chosen policy covers all the important people and possessions you want covered.
Rodney Mouton Insurance Agency

6136 Frisco Square Blvd. Suite 400

Frisco, TX 75034

Phone: 972-542-1388 Fax: 214-705-8376 Email: Moutonagency@att.net Cell: 974-439-7888




After 10 years of being a captive agent of AllState™, I realized my clients would be better served through an independent network rather than a captive network. Captive agents represent only one company and therefore can only offer one solution. As an independent agent I can offer clients the options they expect. It took almost 10 years for me to realize how serious this reality is for an agent who is really interested in his client getting the best the market has to offer. I would not pay more for less and do not expect my clients to. So now I offer the right products from the companies who can best deliver the value my clients require.

Most carriers today use insurance scoring as their major component to determine your cost of insurance. The insurance score will usually be the biggest factor in determining your client’s rate and because of that it is really impossible for us to promise your client any rate until we have ordered your clients insurance score. It is also important to know that each company has its own proprietary scoring system which offers them the best system to get the best price to their target market. Their scoring system can change in relation to their market appetite. An Insurance score and a credit report will sometimes have little in common. In that the good credit report does not always mean the best insurance score. It is part of our job to find which insurance scoring system matches your client’s credit profile.

Our major carriers are Safeco, Hartford and Traveler’s. Below I have a table that shows rates based on a new home with a favorable insurance score, auto-discount, claims-free and alarm discount. I caution you to not promise a client a premium from the chart based on their credit report. Their insurance score and other factors will make a difference that you do not want to find yourself spending your valuable time trying to explain. We will do that for you. We just want to provide you with some idea of what we can offer.



Why would you want refer the Mouton Agency to your clients? We understand that happy knowledgeable clients refer more business. We like referrals. We work for our clients not an insurance company. I promise you will never regret sending a client our way and your closing will never be delayed due to a lack of effort on our part. Integrity is the foundation of our business and it is in the word of God that we discovered integrity. My office is open Monday-Friday from 8:00 to 5:00. Please feel free to call my cell phone outside of office hours for assistance.



I would like to form relationships with others who have a similar approach and understand how this will provide us with a never ending supply of clients for life. I hope you will be inclined to call.