The rise in interest rates has led many home buyers to shop more aggressively for their mortgage loan needs. While there is nothing wrong with obtaining rate quotes from different lenders, there are some things to be aware of as a consumer to ensure you get the most accurate information possible.
When shopping for a new mortgage loan, it is important to find a mortgage lender that is reputable. A simple way to research this is to conduct an online search for the name of the lender and see what comes up – Do they have good reviews from past clients? What does their social media presence look like?
Interview the Mortgage Loan Originator – Feel free to ask questions to determine if you feel it will be a good personality fit. Have they worked with borrowers who are in a similar situation to you before? If so, what roadblocks/issues came up? How did they work past the roadblocks/issues?
In order for a lender to provide an accurate quote (also known as a Loan Estimate), they need to have estimates of numerous variables including credit score, property type, occupancy type, location, purchase price, loan amount, etc. If they do not ask you these clarifying questions be weary. If any of these details change, know that the quote they provided is likely no longer accurate.
Once you have a quote from a lender make sure to ask a couple of follow-up questions, .if they were not already addressed. Ask the lender to clarify if there are any points associated with the quote and what their underwriting and origination fees typically are. It is important to remember that a lower interest rate does not always mean it is the best deal.
What To Do Next
When shopping for mortgage rates and loan programs, it is important that they are procured within the same timeframe. Mortgage rates fluctuate throughout the day/week and as a result, it is not uncommon for rates to change ~0.25% daily.
Sometimes there are new discoveries made in a client’s loan file which can have an adverse impact on an original rate quote.
It is also important to point out that big banks are not better when it comes to mortgages. While it might seem counterintuitive at first, smaller mortgage lenders are often better for a variety of reasons. Small companies are able to provide better rates due to lower overhead along with a better experience and superior communication and speed. Additionally, large banking institutions often pass down large marketing expenses to you as the consumer, move more sluggishly, and have access to less mortgage loan products.
Unfortunately, even some companies which appear reputable on the surface can occasionally employ or practice unscrupulous behaviors when quoting rates. If you get quoted at a rate that seems too good to be true, it likely is. That lender is likely quoting an interest rate that is unrealistic with the hopes that it will entice the client to work with them.
If you have questions about your loan or would like to get a rate quote, give us a call at 760-930-0569. One of our Mortgage Loan Originators will be happy to answer any questions you may have.