I just want to try and help people get over the fact that lowering your Interest Rate by 1% is a very old way of thinking. Basically this is something people created in the 70's when home loans were much lower than today. You could easily save thousands of dollars lowering your mortgage rate by.25% depending on the loan size.
Basically, yes it does make sense to lower by 1% in your interest rate if your loan is smaller or if your interest rates are high. The general population started to use these guidelines back when interest rates were over 10% and home loans were maybe $ 75,000 tops! Now that our average loan is over or near $ 200,000 you can see that is makes sense that a.5% drop in your interest rate would save you more $$$ than it would have back in the 70's.
As a home owner it is your responsibility to actually do the math and figure this out. Also, you can actually talk with a mortgage professional and interview them! Remember, this is your largest asset treat it well, treat it with respect. Treat the mortgage professional with respect trust me you will get a lot farther with them. They are interviewing you too. They are people just like the rest of us, they will not take on a new client if they feel as if they are going to be a pain through the loan process.
The home loan process is really not that difficult to do these days. 20 years ago the process took well over 90 days to complete. Today, with technology this is a very streamlined process that may take 45 days to complete. This time generally consists of underwriting the loan and processing. As a consumer you may only spend maybe 4-5 hours helping with your home loan process, that it! 5 hours tops over 45 days to save thousands of dollars. Sound good to you? Well, it sounds great to me!
In conclusion here what I am trying to get across is do not fall into that 1% mortgage rate rule. Make sure your not the one that is going to miss out on a great deal just because it only saves you.5% or even sometimes as low as.25%. Also, respect your mortgage banker they are now all licensed professional. Think about it, if you spent time and money studying and taking test would not you want respect too?