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 and troubleshooting the issues that may arise along the way. But how can you tell? To make sure you are working with an experienced, professional loan officer, here are four simple questions to ask. If your loan officer doesn’t answer correctly, RUN...DON’T WALK, 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 eye on the wrong indicators.
2. What is the next Economic Report or event that could cause interest rate movement?
   Professional lenders will have this at their fingertips. Typically reports such as the Unemployment Rate, Retail Sales, etc. have the highest impact on interest rates. For up to date reports, just give one of our loan officers a call.
3. When the Fed “changes rates” what does that mean and what impact does this have on interest rates?
   When the Fed makes a move, they are changing a rate called the “Fed Funds Rate”. This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets. For more information, just give us a call.
4. What is happening in the market today and what do you see in the future?
   If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week’s newspaper, and probably not a professional with whom to entrust your home mortgage financing.