One of the "tools" in the mortgage business is the Mortgage Rate Sheet. It shows the "current mortgage rates" so Realtors can provide this information to their clients. The rate sheet is usually faxed or emailed weekly and I see many of them on the bulletin boards of Realtor's offices.
Bottom line - I think the current rate sheet game is nothing more than a Bait and Switch and it hurts everyone. Most lenders quote rates with one point origination fee (which is one percent of the loan amount) but those actual rates would cost the customer two to three times that amount. They use the fine print at the bottom of the sheet as a get out of jail card - the "Rates are subject to change" card. You might ask - Why would they offer something they can't deliver? Because they think it will get them more business. They think if they quote the lowest rates, Realtors will send them more business. What is really does is set false expectations.
The Mortgage Lender loses credibility - the customer is expecting a much lower rate than what they will get for a one point fee.
The Realtor loses credibility - They pass along the rates to the buyers.
The buyer loses faith in the process. Some don't find the truth until they show up to the closing table.
I have decided to start sending rate sheets. My rates come directly from my pricing engine so I know I can deliver what I am offering. The rates won't be unbelievably low - but they will be accurate. My rate sheets will also include some fine print:
These are the current rates for a single-family primary residence based on a 60-day
lock. Your loan's final rate will also depend on specific
characteristics of the loan transaction and your credit profile up to
the time of closing. For more information, please refer to the Loan Pricing Disclosure.
If you are interested in receiving a weekly rate sheet or you have any questions, feel free to contact me.