How to Compare Mortgage Rate Quotes
The first question many customers ask is “what is your mortgage rate?” While that’s a very valid question, it’s important to know that there are many other “home loan costs” that come with home financing. Understanding all the factors and knowing what questions to ask is the key to truly getting the best deal for your individual needs.
Below are some questions to ask your mortgage lender.
What are all the details of the mortgage quote?
Every quote you see or hear is based on specific loan parameters including:
Down payment amount or LTV% (Loan to Value)
Purchase or Refinance
Loan terms such as 15 years or 30 years
Rate type such as fixed or adjustable
Credit score, property type, and other factors
Many mortgage lenders like to advertise super low rates, often that appear to be significantly lower than everyone else. However, very few borrowers ever qualify for those rates. When you read the fine print, you’ll see why. Most “too good to be true” advertised rates are for a 15-year term, refinancing only, 50% LTV or lower, no self-employment with exceptional credit. Even then, you’re not guaranteed that rate. Good lenders will make sure you know the details of your quote, not try to hide them.
Can you clearly explain all the lender fees?
No one lends money for free. Many mortgage lenders like to say their loans are “no cost”. While it’s common practice and often helpful to cash-strapped borrowers to use a slightly higher rate to cover the “costs” of the loan, it’s important that you know exactly what all your costs are whether you’re paying upfront or over time.
Can the “low cost” mortgage lender close on time?
It can be stressful trying to coordinate the sale of your current home, packing, moving and the purchase of your new home. Not closing on time can turn the experience into a nightmare or even cost you the “dream home” you were trying to buy. The peace of mind that comes with an experienced and reliable mortgage lender is absolutely worth it.
Contributing Author: Evan Jansen
Evan Jansen is a longtime mortgage industry expert with over 14 years of experience. Evan has helped more than 800 individuals finance their dream of owning a home. We are a local Denver branch of a national lender, Summit Mortgage Corporation. Licensed in Colorado, California, Washington, Texas, and Florida. Have a question for Evan? Leave us a message and Evan will be in touch shortly.