Q: We are looking either to refinance or buy a new home. I have been looking at the rates in the Sunday paper and place phone calls to various mortgage companies. I realize that there is an influx in demand, however are companies hiring anyone to get evaluations for pre-qualifying prospective loaners? It seems they are unable to answer basic questions, and some of the questions are very basic such as "do you offer 20 year loans?". How should I go about seeking the best rate for my needs? We would like to borrow $250,000 on a $600,000 home. Alternatively, if we did not purchase the new home, we would like to refinance our current home and take out extra for improvements. We currently owe $90,000 on a 30 year 7% fixed rate. Our current home value is approximately $450,000. We have excellent credit.

I also wondered if we could find a lower rate based on our excellent credit rating. Can potential buyers bargain for lower rates with this advantage? Patricia

A: Dear Patricia:

I am sure many others experience the same frustrations that you are currently having looking for a good lender. To deal with the increased loan volume, some lenders lowered their standards and have hired many new and inexperienced loan officers to pick up the slack. If your loan rep doesn't know if they offer a 20 year loan, move on! Call around until you talk to someone who makes you feel comfortable. Your current situation may call for a different mortgage solution depending on your decision to remodel or buy new. If you are buying a new home and plan to be there a while you should consider paying moderate fees and getting the lowest rate possible. If you choose to refinance there are other things to consider before you can make an educated decision such as how much cash you need and how long do you plan to live in your home. A no closing cost loan with a slightly higher interest rate may be a better solution. For more mortgage related news and info visit our website at www.midwestmortgagecaptial.com or call one of our mortgage consultants at 314.787.2900.

Jerry