The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly.

Here are four simple questions to ask your lender in order to make sure they are experienced enough to guide you through the loan process.

‍1. What are mortgage interest rates based on?

The only correct answer is Mortgage Backed Securities or Mortgage Bonds, not the Fed or the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. Do not work with a lender who has their eyes on the wrong indicators. The best mortgage professionals will even show you a candlestick chart and walk you through how it works. If they cannot articulate it in a way that you can understand, then that is a red flag for how they will keep you educated throughout the entire process.

‍2. What is the next event that could cause interest rate movement?

‍A professional lender will have this at their fingertips. While we cannot predict the future, we should be able to concisely discuss what we expect to see in the near future (and why!).

‍3. When the Fed "changes rates," what does this mean... and what impact does this have on mortgage interest rates?

The answer may surprise you. When the Fed makes a move, they are changing a very short-term rate that impacts credit cards and lines of credit... but NOT fixed-rate mortgages. However, the Fed Funds Rate does influence how investors respond, thus affecting mortgage bonds and the mortgage interest rate. Here's how it works:

‍4. What is happening in the market today and what do you see in the near future?

‍If a lender cannot explain and show you a picture of what's happening with mortgage bonds and interest rates, you are probably talking with someone who is not experienced enough to handle one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life, but this is what my team does every single day. And we aim to give you the best mortgage experience possible by giving you the best price and best advice at every step of the way.

Meet the Leo Anzoleaga Group!

Ready to see if we are a good fit for your next real estate transaction? We welcome the opportunity to answer these questions and more! Book your free initial consultation below.