Let’s be honest, who doesn’t like to shop and save? We are in changing times, and now more than ever, it is important to compare mortgage rates before you buy a home. With the Federal Reserve trying to keep its benchmark interest rate at an all-time low, they are doing their part to make sure that credit markets continue to function. For Americans with good credit, taking advantage of these historically low-interest rates can be a great opportunity!
When you are buying a home and plan to finance the purchase, a loan pre-approval document from a lender must be presented with an offer. Before looking at homes it is advised to have that step taken care of. It does not mean that you are committed to that lender; you can shop and swap to another lender later if you find a lower rate. Shopping a few different lenders may be a bit time consuming but it may be in your best interest. Rates can widely vary from one lender to another, and shopping is free!
Have the documentation the loan officer requests available when you are ready to shop. Request quotes from at least three lenders, your current lender, a bank/credit union or any mortgage brokers, boutique or other, where you may have an established relationship. It is recommended that you make the requests on the same day for an accurate comparison. Rates change daily and can expire quickly. Make sure you review all the details of what each lender is offering, rates are not the only thing to consider. There may be other costs, fees and pertinent information within each loan estimate.
If “discount points” or “mortgage points” are mentioned, discuss what the rate may look like without them and that way you are comparing “like” terms, apples to apples. Whether you ultimately choose to buy the points or not, what is important is that you are comparing quotes with like variables when negotiating with lenders.
In any industry that involves human relationship, integrity and transparency are important. Taking the best deal is not always the smartest deal. Finding the right balance between a good lender and a good deal takes time. Ultimately, you may have a long relationship with your lender and want the best service as possible of course. Best of luck shopping for free!
Associate Broker/Verrado Resident