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First: Make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who just quotes rtes, but is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

MY NUMBER 1 MORTGAGE INTEREST RATE AND LENDER SHOPPING TIP: Google the Loan Officer you are thinking of working with! Do you get any hits? What are they? Does the Loan Officer appear to be highly respected and quoted with lots of links? Then you are probably working with a professional. Can't find anything, or maybe just a listing on the company web site? That probably wouldn't be who I would pick to handle my largest financial transaction.



1) What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)

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2) What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, hit the green MMG Weekly banner.)

3) When the Fed "change rates", what does this mean and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they are changing a rate called the "Fed Funds Rate". This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets. For more information and explanation, just give us a call).

4) What is happening in the market today and what do you see in the near future? (If a lender cannot quote current bond prices, explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week's newspaper, and probably not a professional with whom to entrust your home mortgage financing.)


Let me ask you one question. Who would you prefer handling your largest single financial transaction?

1) A Licensed Mortgage professional?
2) An unlicensed call center clerk?

The answer is clear... Now learn the difference

Licensed versus unlicensed loan officers? Who are you working with?

All Loan Officers must have an NMLS number. This number must be displayed on business cards, web sites, etc. It is a tracking number, not a license number. The display of this number gives consumers the false illusion that a Loan Officer is licensed. Sadly, 80% of Loan Officers are NOT licensed. Unlicensed bank loan officers are more like call center clerks. How to verify a Loan Officer has a license.

Licensed Loan officers are held to a very strict licensing standard (SAFE Act). A absolutely ridiculous exemption in the consumer protection laws allows Banks Loan Officers to have different rules. Well, let's just say, no rules! Who are these banks? All the big names (Wells Fargo, Chase, Bank of America, etc.), plus plenty of smaller ones, Credit Unions, and mortgage companies owned by banks.

Now I am not trying to make this into a David versus Goliath story, but I am trying to emphasize the huge differences and implications this has on consumers.

Here is a chart to show the differences in people who are "loan officers"

Actual License Yes No
Pass FBI Background check Yes No
Fingerprinted Yes No
Surety Bonded Yes No
Pre-licensed schooling / education Yes No
8 hours continuing education each year Yes No
Personal Credit checked each year Yes No
Pass difficult State Test in every state Yes No
Pass difficult Federal Test Yes No
Complaint mechanism's Yes No
Licensing fees and renewals Yes No
Registered with NMLS number Yes Yes

Now that you know the difference. Who would YOU rather be working with on the largest financial transaction of your life? Trained, licensed, fingerprinted, and background checked - or the person with none of that?

What to do?

Simple. VERIFY THE Loan Officer is LICENSED: If they don't have a license. DON'T WORK WITH THEM.

What if they do have a licensed? Then Google the Loan Officer you are thinking of working with! Do you get any hits? What are they? Does the Loan Officer appear to be highly respected and quoted with lots of links? Then you are probably working with a top notch professional. Can't find anything, or maybe just a listing on the company web site? That probably wouldn't be who I would pick to handle my largest financial transaction.

How to verify a Loan Officer

It is hard to determine if the Loan Officer is simply registered, versus licensed. When looking up a loan officer, you have to go to the bottom of their NMLS identification page and look under State Licenses/Registrations or Federal Registration heading.

The web site to verify a Loan Officer License is at
  • A LICENSED Loan Officer will say "State Licenses/Registrations" and will have one or more STATES listed with all their state licensing information listed.
  • An UNLICENSED, but simply REGISTERED Loan Officer will say "Federal Registration" and then say something like "Federal Mortgage Loan Originator".

Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are the rules and secrets you must know to shop interest rates and closing costs effectively.

First, IF IT SEEMS TO GOOD TO BE TRUE, IT PROBABLY IS. But you didnt really need us to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?

Second, YOU GET WHAT YOU PAY FOR. If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Would you ever want to travel in a car or airplane that had been built using the very cheapest materials, built by the very cheapest laborer? Probably not. Best case, expect very little advice, experience, or personal service. Expect things to go wrong, rates and cost to change, and to not close on time. Worst case, expect that you may not close at all. All too often, you dont know until its too late that cheapest isnt BEST. That being said we are not the cheapest. Of course our rates and costs are very competitive, but we have also invested in the systems and team we need to ensure the top quality experience that you deserve. If you want the cheapest head on out to the Internet, and we wish you good luck. But remember that the cheapest rate or cost on the wrong strategy can cost you thousands more in the long run. Remember, this is the largest financial transaction most people will make in their lifetime.

Third, MAKE CORRECT COMPARISONS. When looking at estimates, dont simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not hidden down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison.

Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND. This means that you can have any interest rate that you want but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all but understand that this comes at the expense of a higher interest rate. Do you honestly think Ditech can charge only $395 and NOT effect your interest rate? Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.

Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY. This means that if you are comparing lender rates and fees this is a moving target on an hourly basis. For example, if you have two lenders that you just cant decide between and want a quote from each you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.

As you can imagine, we wouldn't be encouraging you to shop around if we were not pretty confident that we feel that we can give you a great value and serve you the very best.

More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life, but we do this every single day. It's your home and your future. It's our profession and our passion. We're ready to work for your best interest.

Thank you for giving us the opportunity to compete for your business. - Joe Metzler

Mortgages Unlimited Minnesota
33 Wentworth Ave E, St Paul, MN 55118
(651) 552-3681

Member, Minnesota Mortgage Association

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Mortgages Unlimited, Inc. NMLS # 225504. Joe Metzler NMLS # 274132