What it means to be pitched Par Rate.
The definition of ‘Par Rate‘ when dealing with a residential mortgage is the base interest rate you qualify for relative to all of the following factors: fico credit rating, down payment percentage amount, type of home (single family, condo, townhouse, etc.), type of mortgage product (fixed vs. adjustable), days that rate needs to be valid for also known as the expiration date (from lock date to closing day) and finally points or no points. Basically all of these details wrapped into one scenario are what delivers a rate and the ‘par rate’ delivered is that to you at a zero cost.
What happens to a rate if it is no longer par. It simply means that you can pay money to buy a lower rate; discount points. This can also work the other direction in which you can take a higher rate to get a lender credit, using that credit to pay for other related costs associated to buying or refinancing a home.
Wow, National Rates look much lower, why? Why else besides a marking ploy to get you to call and once you roll in all your scenario details tied to par rate not paying money, you’ll see what happens to that rate, it balances out.
I found a lower rate online from a guy that does loans out of state, I’m going that way….Good luck I say! Working solely on what you want to hear vs. the realty typically leads to changes or detrimental issues that can delay the process and possibly lose you the home. Do not forget the major goal when buying a home, which is getting you into your home!
It is your personal due diligence to shop smart and kicking tires until you hear something lower than where the rest of the market is likely means that person just pitched you something slightly wrong.
There is no magic hat full of even cheaper money – mortgage rates are all coming from the majority of the same place, banks. And most of the banks are all on the same page as they too compete for your business – So, buyer beware of that pitch with a lower than normal rate!