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Question:

LendingTree Loans? Read details?

OK, this guy @ lending tree says he can't tell me my APR until the loan is "locked in" on the house I want to purchase? Is that even legit? Yeah, he did quote me an interest rate but even with that, he couldn't be sure. Kinda fishy in my books, too.

Answers:

1) That could be. He won't know what that is precisely until you lock. If you don't have to lock in the next 3 weeks, I'd wait, we're praying for a rate decrease from the Feds.

2) Yes, how can you have your APR without having your regular interest rate? whatever rate you were quoted could cost more or less based on market conditions and until the rate is locked in, its not guaranteed.

3) Loan rates change constantly so I guess they can't lock in the rate until you have a house identified. They should give you an estimate though Why did you choose lending tree versus a local bank? I'm not sure you'll get any better rates, and with a local bank you at least get to talk to someone in person

4) It is legit in the sense that he can't guarantee the APR he could quote you until your rate is locked and your fees are calculated. For his protection he is trying to side step the question (not the best policy, clearly) and tell you a screened answer instead of explaining it to you like I am here. First of all your APR is factored by a combination of things, it is not the same as your "Note Rate," or the rate you actually pay on. It is your "Note Rate" plus your non-reoccurring closing costs amortized over the first year of your loan expressed in a percentage. (Now say that 5 times fast.) Anyway, yes he is being a little "shady," but not in a malicious way. Most loan officer's are so worried about losing business that they don't properly educate their clients, when in fact that is exactly what has helped me grow my business over the years.

5) You wont know the APR until the rate is locked in. Be careful because you could get locked into an ARM. Be careful using online sources for loans. You should use your bank where you to your banking instead of LendingTree. LendingTree is warehouse of mortgages that are sold as soon as you sign the papers. Puting you in the hands of unscrupulous people. BEWARE.

6) APR is not the interest rate you'll be paying for your loan. APR is the closing costs you are paying to obtain the loan. The loan officer can give you an idea of what your rate will be, but you won't know the definate interest rate until your loan is locked in. He is correct.

7) He can give you an APR based upon the rate available today but it will change if the interest rate is different when you lock in. I fyou compare APR's at the same rates from different lenders you can determine which is the most cost effective loan as the APR is a reflection of the cost of borrowing the money. Anyone who won't explain that to you is less than professional and probably more concerned with the amount of commission he will make on you than on yoru best interests. The best loan officers are more than willing to educate you and make certain you understand all of your options so that you can make the decisions rather than steering you into a loan that will make them more money. If he won't give you an estimated APR based upon the prevailing rate today, run, don't walk, and find a loan officer you can trust. As I see it, this is the probelm with Lending Tree. They are just a lead source for a multitude of lenders who assume that they can capture borrowers solely on low quote interest rates. There is a great deal more that determines whether or not the loan is the right one for you. Good luck.

8) He can give you a rate and APR. However, you can't be locked in until you have a signed purchase agreement. I think he may have been trying to tell you that none of it matters, unless you are ready to lock. Rates change every day. I can tell you 6% today and all of a sudden it is 6.25% tomorrow, due to market fluctuations. Beware of the bait-n-switch. I used to purchase Lending Tree Leads and could not, for the life of me, figure out how these lenders get away with advertising those absurdly low interest rates. When talking with these people, tell them you have a purchase agreement and are ready to lock. Shop all of the lenders in the same day. Get Good Faith Estimates in writing. Compare the interest rate and the lender fees. All of the third party fees will end up being the same in the end. Most lenders don't actually know all of the third party fees. If someone has a higher rate but lower fees, you can always pay points to lower the rate. Everything is negotiable between rate and fees. If all of the rates and fees are similar (they all should be), choose someone you enjoyed speaking with and that you think you can trust. This could be the biggest financial decision in your life. Good Luck!

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