Homebuyers: You’re Looking at the Wrong Metrics — and Most Mortgage Originators Aren’t Getting It Either — Because There’s More to a Good Plan Than Just Rate and Fees

Homebuyers: You’re Looking at the Wrong Metrics — and Most Mortgage Originators Aren’t Getting It Either — Because There’s More to a Good Plan Than Just Rate and Fees

This is a true story about a very smart couple buying a home. They both had great jobs, strong income, and plenty of savings. On paper, they were in excellent shape. But like many buyers, they were nervous.

Their rent was $2,500 a month, and their new home payment would be around $4,500 a month. That’s a big jump — especially with $3,000 a month in daycare costs. Even though their debt-to-income ratio was fine — about 29% without daycare and 40% with daycare — the higher payment made them uneasy.

They started to do what many people do when they feel uncertain — they asked everyone for advice. Family, friends, coworkers — everyone had an opinion.

Listening to the Wrong People

At one point, they said their aunt — who actually works as a mortgage originator in another state — told them to “call Rocket Mortgage” to compare rates.

Now, I respect buyers doing their due diligence to make sure they’re getting competitive pricing. That’s smart. But I couldn’t help wondering — does their aunt tell her own clients to call Rocket Mortgage to compare her rates too? Probably not. Because that’s just not how you help clients make good financial decisions.

That kind of advice only creates confusion and takes the focus off what really matters.

The Real Plan That Made Sense

We had already built a great plan that worked. They were putting 15% down and had only $70 a month for PMI. That’s incredibly low, and it allowed them to keep over $30,000 in savings as liquidity — money that could be used for emergencies, repairs, or future opportunities.

But they were focused on PMI like it was the worst thing in the world. They were ready to put that entire $30,000 into the mortgage just to remove it.

That would have been a mistake.

With home prices appreciating and refinance opportunities likely in the future, that PMI would disappear naturally over time. It was simply not worth losing $30,000 of liquidity to get rid of a $70 monthly charge.

Their focus should have been on cash flow and liquidity, not eliminating a tiny PMI payment.

Their financial advisor should have led with that message — but he didn’t. In fact, he offered almost no leadership at all. He was about to let them pull money from their liquid assets — money that could grow over time, be used for college funds, or serve as an emergency cushion — just to lower their mortgage payment by a few hundred dollars a month. That is not good financial planning.

Understanding the Rate Reality

Rates were around 6%. That’s not “high.” In fact, it’s historically low when you look at the full history of mortgages.

People get stuck thinking that rates in the 2% to 3% range were “normal” — but those years were abnormally low. They were the result of short-term economic factors that can’t last forever. Historically, 6% is still an excellent rate.

The couple didn’t understand how rates actually work. They thought they could keep shopping around to find something better, like stores offering different prices for the same item.

But mortgage rates aren’t like that. They’re based on the secondary market, and they change multiple times a day based on economic indicators — just like the stock market.

So when they were focused on “finding a better deal,” they were chasing something that doesn’t exist.

The Math That Actually Matters

They were trying to lower their payment by thousands of dollars a month through rate and price shopping. But the math didn’t support that.

Here’s the truth:

• Every ⅛% change in rate moves the payment by about $53 a month, or around $30 after taxes.

• Every $10,000 difference in loan amount changes the payment by about $60 a month, or about $40 after taxes.

So that “better deal” they thought they’d found with Rocket Mortgage — an ⅛% lower rate — would have saved them less than one dinner out per month.

Meanwhile, the plan we had built actually made a major difference:

• Paying off a $9,000 student loan to free up $700 a month

• Adjusting their W-4 so they could see their tax savings in each paycheck instead of waiting for a refund

• Keeping $30,000 in reserves as a cushion for daycare years and unexpected repairs

• Adding a home equity line of credit as a safety net with no payment unless used

That’s real planning. That’s the kind of financial structure that helps families stay safe and thrive long term.

The Big Picture They Were Missing

Their situation wasn’t risky — it was just tight while their child was in daycare. Once daycare ended, they’d free up $3,000 a month, and their monthly payment would fall well below normal debt-to-income levels.

They were focusing on the wrong metrics. Instead of worrying about a ⅛% difference in rate or eliminating PMI, they should have focused on cash flow, liquidity, and timing.

Because in just a few years, their entire financial picture would change for the better — and they’d still have money in the bank, a growing home asset, and lower monthly obligations.

The Truth About Price-Only Shopping

There’s a difference between doing your due diligence and pitting lenders against each other just to fight on price.

Doing your due diligence means checking to make sure your quote is competitive. That’s smart.
But turning it into a bidding war slows down your process, delays your closing, and alienates the very people trying to help you.

When you make lenders compete only on price, you send the message that their experience, advice, and effort don’t matter — that they’re just a number. And that’s not how good relationships work.

A small rate difference might save $30 a month.
A great team that understands your goals can save thousands — and guide you for years.

Final Thought

A mortgage isn’t just about rate and fees. It’s about strategy, advice, and protection.

When you work with a team that looks at the full picture — your income, goals, tax situation, and future plans — you get more than a loan. You get a plan that works for your life.

The couple in this story didn’t need a lower rate. They needed leadership, education, and clarity. They needed a team that could help them focus on the right metrics: cash flow, liquidity, and long-term growth.

And that’s what a great mortgage originator does.

⚠️ Risks of Using an Inexperienced Mortgage Originator or Choosing Based Solely on Price

1. Poor knowledge of local market / guidelines — An inexperienced loan officer may not know the local area or the specific loan-program rules and regional quirks.

2. Increased risk of delays or mistakes — If they don’t anticipate roadblocks (zoning, appraisal issues, underwriting changes), your closing can be delayed or derailed.

3. Overemphasis on low rate/fees vs. full strategy — Focusing only on the lowest rate or closing cost can blind you to cash-flow, reserves, future refinance options, equity growth.

4. Lack of accountability or service — Online or large “call-center” lenders may not provide a local presence or personalized oversight if things go sideways.

5. Missing the bigger financial picture — A loan originator who’s inexperienced may not coach you on things like debt payoff, tax-planning (like W-4 adjustments), liquidity, or HELOC strategy.

6. Weak preparation for future events — For example, not planning for daycare ending, reserves, unexpected repairs, or a rate drop/refinance down the road.

7. Liquity risk — If you push too much money into your down payment or PMI elimination just to get a slightly lower rate/fee, you may leave yourself short on cash for emergencies.

8. Misinterpreting mortgage rate behaviour — Mortgage rates are driven by the secondary market and economic indicators, not just lender pricing. An inexperienced originator may not explain this well.

9. Potential for “shopping around” issues — Pitting lenders purely on price may slow things, confuse communication, weaken teamwork, and risk missing key dates.

10. Service dropoff & lack of follow-through — If the originator is new, turnover may be high and support structure thin; you may suffer when time is short.

11. Hidden or unanticipated costs — Some lenders may offer a low headline rate but hide fees, or reduced service quality.

12. Inadequate planning for underwriting or closing contingencies — An experienced lender will guide you through document requirements, potential glitches, and keep you ahead of issues. Inexperience increases risk.

13. Reduced long-term value — The lowest upfront cost may cost more over time if you miss out on refinance opportunities, tax advantages, or other strategic moves.

14. Poor communication & trust — Lack of experience often comes with less clarity, more jargon, slower responses, and less confidence. All this adds stress and risk.

15. Competing only on rate/fees treats you like a commodity — When you treat your originator simply as a price vendor, you diminish the value of their advice and support. That may affect how you’re treated.