Five Questions You Must Ask Your Loan Originator

If you've been a Mortgage Porter subscriber or have seen my posts at Rain City Guide, you know how I feel about chosing your mortgage by who's quoting the lowest rate.   However, if you feel you must…here are a few quick questions to ask the loan originator to make sure they qualify to care for your largest debt which is tied to your biggest asset. 

What are mortgage rates based on?

What is the next economic report or event that can trigger interest rate movement?

When the Fed changes rates, how does this impact mortgage rates?

Should rates improve after we lock, what are my options?

Will you gurantee your closing cost shown on your good faith estimate?

Nothing is more expensive than chasing rates and winding up with the wrong mortgage.  The best plan is to have the correct mortgage from the start so you can hopefully avoid refinancing (unless rates dip low enough to justify based on your financial plan).


  1. I’m curious as to why people should ask what the fed changing rates has to do with mortgage rates? The fed changes the discount rate which has nothing whatsoever to do with mortgage rates. Mortgage rates tend to follow yields in the bond market…now that I say this I’m sure this is the point you’re making…

  2. Robert, bingo!

  3. How much should rates dip before considering inquiring about refinancing?

    And what would be a reasonable ‘guarantee’ on closing ‘on time?’

  4. Hi Di, most people believe that rates need to be better by 1% before refi when actually, there’s more to consider than that. For example, if someone is planning on selling their home in the next 6 months, it may not make sense to refi. Here’s an article that I wrote with other considerations on whether or not someone should refinance: /2008/01/when-does-it-ma.html

    I wrote the article the last time rates were this low, at the beginning of this year.

    As to your second question, I tell clients (right now) to plan on 30 days for closing their refinance. A refinance is similar to a purchase where title reports and appraisals must be complete. The amount of time is also impacted by how quickly the borrower responds to items needed to process and underwrite the transaction. Should we enter a “refi boom”, time to complete the transaction may take much longer (45-60 days).

    Your question is an excellent one for a borrower: How long will it take to close my refinance and what happens to my rate-lock if it takes longer?

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