Shopping Around Mortgage Rates
Loan OffersWhen you apply for a mortgage you should receive a written “Good Faith Estimate” within three days of your application.
This good faith estimate is a written estimate of your mortgage rate and closing costs. It is not a guarantee. Your interest rates and closing costs may change.
Comparing Offers
The first thing to do when comparing offers is to compare offers for the same loan type.
You should compare an offer for a 30 year fixed from one lender with a 30 year fixed loan from another lender.
The loan sizes should be the same or similar, and you should also receive the quotes from around the same day if possible.
It is important to know that mortgage rates can and do change everyday. If you get a quote on a Monday from one lender and another quote from a different lender on Thursday the offers may not be comparable. This is because interest rates may have changed during those several days. Just because the offer on Thursday is lower doesn’t mean the lender is better. The lender that made the offer on Monday may be able to match or beat the offer you got later.
Negotiating Your Fees
You may have some leeway in negotiating your fees. There are some fees, such as administrative or processing fees, that a loan officer may have discretion over.
How You Pay For A Loan
Your loan closing costs can be paid one of two ways.
You can pay them upfront from the proceeds of the loan.
You can also have a “no closing cost” option. This is usually when you get a higher interest rate instead of closing costs.
Many lenders and mortgage brokers offer a “no closing cost” option.
Out of Pocket Costs
Most loan fees can be paid through the loan. Some fees you may have to pay out of pocket. These include your appraisal fee, which is often around $350 but can vary based on the property value.
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