Over the past year, homebuyers have watched interest rates on home loans continue to rise. Even though rates are still considered historically low on average, it鈥檚 stressful for people looking to buy homes or refinance existing mortgages.
Jeff Bentley, president and CEO of , said that most people chase the interest rate. But he cautioned that rates change 鈥� in some cases hourly. 鈥淚f someone鈥檚 quoting a rate today, by the time you鈥檙e ready to pull the trigger on that loan, the rate has probably changed again.鈥�
So what should a homebuyer consider when choosing a mortgage lender? Bentley鈥檚 advice: 鈥淕o with someone that you feel you can trust. Not someone who is just pushing product and then they forget your name as soon as the deal鈥檚 done.鈥�
If you鈥檙e shopping for a mortgage, you have options
Northwest Federal offers first-time homebuyers both a 100% finance option and聽 a 97% finance option, which has a slightly higher rate.
Bentley said the credit union focuses on helping people and building long-term relationships. And part of that help is educating customers about the different financing options as well as the ups and downs of the various products that are available.
For example, 鈥測ou can do a 30-year fixed mortgage. You can do a 15-year fixed mortgage. You can do a five-year ARM, which is an adjustable rate mortgage,鈥� he said. 鈥淚f you think rates are going to come down in the near term 鈥� in the next three to four years 鈥� maybe an ARM would make sense for you.鈥�
But ARMs come with a risk.
鈥淚f you鈥檙e more conservative, and you want to know what tomorrow holds from a payment perspective, you probably need to focus on a fixed rate,鈥� Bentley said, 鈥淭hose are questions and conversations you need to have with an expert聽 somebody that you can trust that does this every day and is looking out for you and not trying to maximize their profit.鈥�
Ultimately, that鈥檚 the goal of Northwest Federal 鈥� to be a trusted adviser, he said. Yes, it aims to provide competitive rates, but it also wants to be an educational source for its customers and to establish lasting partnerships, Bentley added.
When is the best time to buy?
One big question many people have, especially in the current environment, is: When should they buy a house?
鈥淭he best time to buy is when you鈥檙e ready to pull the trigger on the house that you find,鈥� Bentley said. 鈥淚f you鈥檙e trying to gamble and wait for the best- rate environment or wonder if that house price is going to come down, frankly, no one has that crystal ball. You鈥檙e just going to make yourself crazy trying to do that.鈥�
A number of banks and credit unions have closed or reduced their mortgage operations because of profitability concerns. 鈥淭hey鈥檝e got all these employees, and nobody鈥檚 buying homes. And so the layoffs start,鈥� he said. 鈥淲e don鈥檛 do that. We have long-term employees that know this business. We don鈥檛 consolidate. We don鈥檛 ebb and flow with the mortgage industry. If you鈥檙e searching for a company to find a good product, a good product that matches your situation, not what helps a bank or even another credit union find the most profit, stop searching and go Northwest.鈥�
