I was just offered a 30 year fixed rate at 4% for Free!

What does it all mean. How can one lender offer 1%, another 4% and the financial report says 6% and your bank or broker actually quotes you 6.5%? It's all in SEMANTICS, "grey area" marketing and reality. Most loans are 30 Year Loans, so they quote that, however, the fixed period varies and the Points you pay (or don't pay) can change the rate. Advertisers may say "30-year loan with a Fixed Payment" which is NOT a fixed rate....or a 30 year loan Fixed at "X" percent...(but fixed for how long???). Deceptive advertising gets the phone to ring, then you get the "bait and switch" in many cases. When the Financial Report says Fannie Mae/Freddy Mac offering a 30 year fixed mortgage at 6%, that's the bare bones wholesale pricing; it doesn't include the cost to actaully obtain that rate. Here's a sample of what I might see in one of my many market rate updates:

Security Price Change Intra-Day
FNMA 30 6.0% 99.97 00 BPS
FNMA 30 6.5% 101.50 00 BPS
GNMA 30 6.5% 102.22 00 BPS
FNMA 15 6.0% 101.06 00 BPS
US 10 YR 100.44 00 BPS

This shows Me that at One Point I can give someone a standard 30-year fixed rate at 6.0%. It also shows me that at NO POINTS I can do it at 6.5%. This is your standard Full Doc convential conforming fixed rate loan. There are MANY options you can throw into the mix from Adjustable Rates to shorter and longer term loans, negative amortization, interest only and more. Need the real rates? Contact Pat Townsley, California State Licensed Mortgage Broker. 415-485-1776 at http://www.ptre.net/. Thanks.