The question most often asked by mortgage applicants, is “What’s the rate”. But that’s not often their real concern. It’s understandable to think interest is key but it’s only a part of a transaction. The primary concern for most mortgage applicants is monthly payment.
No one really wants a drill…what they want is a hole. Likewise, no one really wants a mortgage. Like a drill, the mortgage is the tool to help people get what they want and the rate and payment are just details, albeit important ones, of that tool.
A purchase mortgage helps a client buy a home. A cash-out refinance provides funds for a particular purpose and a rate/term refinance lowers rate or shortens term, either providing additional cash by reducing the mortgage payment or, with reduced term, paying off the home sooner, thus building equity quicker and substantially reducing total interest paid.
Rate is important as it relates to payment over term and payment is important as it relates to qualification and to client comfort levels. However, just like proper drill and drill bit are details needed to provide the proper hole, rate and payment are details needed to ensure the proper mortgage to best achieve the desired goal.
Besides working with an experienced, knowledgeable loan officer, the key to obtaining a mortgage that best fits your needs, is to have a clear goal in mind. Once that’s determined, it’s easier to recognize benefits of each loan option and therefore, much simpler to make a wise choice.
Joe Adamson Ofc: (408) 975-2400 x123 joe@mortgagemagic.com
NMLS #234559 BRE #01090504
Mortgage Magic NMLS #331340 BRE #01104088
