How to Select a Mortgage Professional

How to select a mortgage professional? This could be a million dollar question!

I just went through 3 days of intensive training (7am - 9pm daily) and got certified as a "Certified Mortgage Planning Specialist" by the CMPS Institute. So, what does the CMPS training program entail? Well, mortgage professionals received education on mortgage related tax laws, investment strategies, financial planning concepts and more. The idea is not to turn mortgage professionals into experts in those other areas, but rather that we become knowledgeable enough so that we can better assist our clients in choosing the appropriate mortgage program that fits their overall financial goals.

As consumers, we've been trained to "shop" for mortgages by rates and fees. We were taught that mortgage is a necessary evil if you want to become a homeowner. But, how many people have actually stopped and wondered how much money will a wrong mortgage program cost them in the long run?

The other aspect of becoming a CMPS member is that it is a reflection of those of us who are truly professionals who are committed to continually educate ourselves and sharpen our skills so that we can help clients adapt to new market conditions. In this turbulent market, many people are getting out of the industry because there is no longer a quick buck to be made. I was told recently that 60% of loan agents in 2006 are gone now, and I expect more to drop off in the coming year.

This really begs the question: who are you going to use the next time you are looking for a mortgage? What criteria will you use to select the right person? Here are 4 simple questions your lender absolutely must be able to answer correctly. If they don't know the answers, RUN. DON'T WALK. Run to a lender that does!

1) What are mortgage interest rates based on?The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT 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.

2) What is the next Economic Report or event that could cause interest rate movement? A professional lender will have this at their fingertips.

3) When Bernanke and the Fed "change 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 can change a rate called the "Fed Funds Rate" or "Discount Rate". These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call.

4) Do you have access to live, real time, mortgage bond quotes? If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday's newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday's paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!

Be smart... Ask questions. Get answers! More than likely, this is 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 we do this every single day. It's your home and your future. It's our profession and our passion. We're ready to work for your best interest.