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Moving into a home at record low rates requires a bit of research

August 9, 2010 - While most agree that mortgage rates are at a reported record low 4.5 percent, some brokers warn not to expect to see that actual rate once borrowers move into a new home.

The low rate that Freddie Mac and Fannie Mae have advertised is a "base rate prior to distribution to lenders," and not necessarily the rates a lender will offer, wrote mortgage banker Joe Adamaitis in Florida's Bradenton Herald.

Adamaitis said in an e-mail that a borrower with great credit and 20 percent down would likely see a fixed rate between 4.75 and 4.87 percent. Homebuyers can sometimes pay more in fees to lock in a slightly lower rate.

Adamaitis writes that the low rates talked about in the news are the rates before any fees have been added.

"It's like buying the lobster off the boat from the lobster man, before the distributor and ultimate retailer has had a chance to add on a profit," Adamaitis wrote in his column in the Herald.

Adamaitis notes that laws calling for "full disclosure" should apply equally to all lenders, including Freddie Mac & Fannie Mae, and that it's "misleading" to advertise rates that can't actually be locked in.

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