Broker Beware-Mortgage Rates BS

Brokers say the darndest things

This is a warning against any callous declaration of fact. Especially one tied to a random pattern.

Email blast from a mortgage loan broker (the guy who arranges your house loan) about the interest rate paid on mortgages: ” This email is being sent to all my clients, to inform you of the rate pricing has dropped significantly, if you were waiting for rates, this is the best it’s going to get. Also if you look at the past history of rates for the last 3 months, every time we get close to the 3rd of the month pricing dropped, it’s the same case this month.”   

The interest rate determines the cost of your loan, so a lower interest rate is better.  This guy has fished out a pattern in mortgage rates by looking at the rates every 3rd of the month (ok for the last few months).  Btw, the first thing brokers learn (well, smart ones) is that past performance is not indicative of future results.

Now if he wanted to make an intelligent argument, maybe he would bring up non-farm payrolls that occur the first Friday of each month and their potential impact on interest rates.  But saying rates are the lowest on the 3rd of the month, just because they’ve been for the last few months, is like saying rates are low because my Starbucks coffee tasted the same the last 3 months, or because my toenails were painted purple for the last 2 weeks.

 

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