Shopping for the best interest rate possible has always been the consumer’s primary objective when borrowing money, as well it should be! The challenge with this strategy is that there is much misleading information released by various media. Web sites and e-mail marketing along with radio, TV and billboard advertising has brought the importance of interest rates to the forefront of consumers’ minds.

The problem for the consumer is that this type of marketing is designed to make the lender’s phone ring. Often the advertiser offers an interest rate at a ridiculously low price, with the intent of using a bait-and-switch technique once the client is reeled in.

This is often done through short pricing. Short pricing is a term used when a lender offers an extremely attractive interest rate, but that rate is only locked in for a brief period.

The average consumer enters into a purchase contract to buy a home for at least 30 days. Pricing on the interest rate locked in for a 10-day period is of no use to most prospective home buyers. It simply isn’t enough time to complete the transaction.

While the billboard advertising or Internet banner ad may boast a terrific rate, the lock-in period is often not realistic in terms of providing enough time to negotiate a purchase contract and close the deal.

Be careful when shopping for interest rates. When you are quoted a rate, you ask the broker what the lock duration is. Make sure the lock period allows you enough time to complete your purchase.

Understanding how interest rates lock in is one of many important steps in the mortgage loan process. One of the best ways to avoid issues with rate shopping is to work closely with a mortgage loan expert to establish a step-by-step plan. Don Delor and the team at America One Finance have the experience to assist you in establishing a mortgage loan plan.

? Contributed by America One Finance