99% of buyers think that Shopping for a Loan means calling a bunch of lenders and asking, "What are your rates?" They assume that the way to save the most money is to find a lender with the lowest rates and costs.


Let me demonstrate this with two graphs which demonstrate this. First I want you to see how competitive this business really is. I got rate information from 30 leading lenders and this graph shows the distribution of points at the same rate, 7.625%. The graph shows the number of lenders at each price.

What it shows is that 24 of the 30 lenders. 80%, were quoting either 1 point, 1.125 points, or 1.25 points. On a $125,000 loan, we are talking about differences of only $125 from the average! I'll bet that is a lot closer than you figured it would be. When you think about it, a $125 savings hardly makes shopping worthwhile. Well, it gets better.

This is a graph of the change in points at the same rate over a two month period of time! I kept the rate constant to show the variability.

If you locked in on day 1, you'd have paid 1.5 point but if you'd locked in on day 3 or 8 you'd have paid 1.25 points. If you were spooked by rates and locked in on day 22, you'd have paid 2 points. If you were lucky and rode out this period and waited until day 41 to lock, you'd have paid zero points. Note that the overall range is 2 points! Even during the first half of this period the pricing varied from a low of 1.25 points to a high of 2 points.

You probably assume that most people lock on the days when the points were the lowest. Not so! I talk with the big lenders and they all say that just about the same number of loans are locked in every day.

So what do we learn from this:

  The price variability between lenders is plus or minus 1/8th of a point, $125 on a $100,000 loan.

  There is no aspect of good service which is not worth more than $125!b

 The price variability over time was much higher, plus or minus 1 point.

Here's the inescapable conclusion:

If you want to get the best deal, it is far more important to figure out WHEN to lock-in than it is to spend time trying to figure out which is the cheapest lender.

I have been in this business for 19 years and I have funded over 2,200 loans. Every single one of them had to be locked-in at some particular point in time. I've done an absolutely terrific job of locking 95% of my clients in at one of the low points during whatever period they were "in the market."

When selecting a lender, you want someone that can help you with this most important task.  If you're "on your own, " then be sure to read my book and keep up with the information on the  READERS PAGE.

If you live in California and would like my personal attention to your loan, APPLY.