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Comparison shopping for a mortgage can be frustrating for even a seasoned pro. It seems like every company has a slightly different estimate forms and call various fees different things. It is extremely difficult to get an apples to apples comparison. But the one thing that you shouldn’t do is get the quote over the phone or off an internet site. Always get your quote in writing in the form of a Good Faith Estimate. Follow these steps to insure you’re comparing the same thing:
- Get a Good Faith Estimate in writing. Ask for at least 2 quotes, one with a 1% origination fee and one with no origination fee. This will give you the breakdown of what the actual closing costs are and the rate for each. We will often give you 3 or 4 options to consider.
- Compare the total cost of these options over the period of time you feel you will have the loan for. We know that you don’t necessarily have how long this will be but a good rule of thumb is 3 -5 years. The average loan in our market pays off in 3.7 years due to a home sale or refinancing for one of several reasons. We have a software program that does a fantastic job of making this comparison clear and concise.
- Consider compensating factors:
- Is the lender local, can you meet in person?
- Do they offer a comprehensive guarantee in writing? Click here to learn about our 3/1 Guarantee
- Do they make you write a check upfront in the form of an “application fee”?
- Do they let you lock the interest rate immediately and will they issue a Rate Lock Commitment? Click Here to see a sample of ours
- Have they committed to monitor your mortgage after closing and look for opportunities to lower your rate for free?
Understanding home finance and finding the best mortgage can be complicated. Finding someone competent that can guide you through the process and remain objective is a challenge. We work hard to fill that role and insure that the mortgage that you choose and combination of rate and cost aligns with your overall wealth building strategies
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