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Why “local mortgage rates” thing is just a marketing strategy

1. Let’s say that you are shopping for a interest rate for a Destin Florida mortgage and you get out your Sunday newspaper and go to the Destin Real Estate section to see what mortgage rates are doing that day. You see some 20 different mortgage companies offering different rates saying that sense they are a local mortgage lender they can give you better rates. This is not always the case.
2. Mortgage rates have nothing to do with where your house is located. Mortgage rates do not care where you live to be exact. They just want to know whether or not you are going to give them a new home with a new home loan.

3. Local lenders use this local mortgage rates are better than national mortgage rates thing as a trick for you to get off of your butt and walk into their office instead of you getting on the internet, then the phone and calling up a couple places. They know its hard for you to walk out of an office saying no when everything makes sense. On a phone its easy to just hang up.
4. You can’t blame the mortgage broker or bank because they know that there is a small percentage of people that feel like they are getting a better deal with everything that they buy when they buy it close to home. It’s like living near Detroit and saying that Ford is going to give you a better deal on a new Ford Fusion than somebody who lives in New Mexico just because you live near the Ford’s world headquarters. Business does not operate that way.
5. For those of you that do not know, mortgage rates are determined every day on the stock market. There are a number of factors that go into this but the main one is the 10 Year Treasury Bond. There is no Local 10 Year Treasury Bond. Its the same for everybody.
6. Since all lenders, mortgage brokers, and banks all determine their rates from the same place this let’s us know that the “local mortgage rates” thing is just a marketing strategy.
7. To determine what mortgage rates are going to be for a particular day just go to a major site like CNN, find the 10 year and add 2%-3% on top of that number.
8. Like I said earlier this is not the only factor that goes into finding out what the 30 year fixed rate mortgage is going to be for the day but its close. If you talk to a couple mortgage bankers that day and they tell you less or more than those numbers than their either low balling you or trying to over charge you.
9. Don’t fall for the local mortgage rates ploy and think you are getting a better mortgage rate. Your not. All that you are really doing is supporting your local community.Which is very noble thing to do BTW.
10. If you want to test out my theory call up a national lender like Countrywide or Quicken Loans. Get their rates for the day and then immediately call your local mortgage broker or bank. You will see that they are relatively the same.

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