The most asked question in the mortgage industry and the driving force behind most loans is the famous "WHAT IS YOUR INTEREST RATE??!!" On one hand it seems to be the most valid question you as a consumer could ask. It directly effects your monthly payment and seems to be the biggest determining factor between banks. It is also the biggest mystery to my clients and probably most loan officers.
The simple truth is that interest rates are like stocks... they go up and down throughout the day and unfortunately for us banks are just as unpredictable.
To better explain I like to tell my clients that the interest rates aren't really what changes... it is the cost of those rates for the bank that moves. If 5.00% costs the bank nothing you will pay nothing for it (no points), but if it costs us 1.00% of up front interest you will have that cost passed along to you and pay 1 point. Although this can change from bank to bank it is close enough and allow you to get the picture.
The reason why interest rates are different at different banks is simply that they all have their own profit margin. Banks have to make money like any business and like any business have a profit built into their product, which in this case is lending money.
Of course I have to tie this all into why I chose to manage a branch for a private bank and not a community bank or large lender. After years in the business I have found that smaller banks have less overhead, less red tape and more flexibility. This allows me and my loan officers to truly service our clients.
This leads me to my final point.... SERVICE.
It isn't a word spoken of anymore in our society. I am a consumer just like you and cannot stand when I am giving someone or some place my business with the feeling like they really don't care or even want it. When getting a mortgage there are 100 steps to go from an aplication to closing. Picking the interest rate is just 1 of those steps so it is very important to be able to handle the other 99 items needed. This is why I personally handle all online requests so if you are reading this you will only deal with me before AND after closing your loan. My goal is to have everything go so smoothly that you will gladly send friends and family to me for future business. This is one of the cardinal rules at my branch.
I hope this gave you a better insight into the mortgage world and helps you in your search for a loan.