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    What to Look For When Comparing Mortgage Lenders

    June 28, 2022 By JMcHood

    It’s always a good idea to shop around when looking for a mortgage. What happens once you have a few quotes from different lenders, though? How do you decide which one is right?

    Get Matched with a Lender, Click Here.

    We help you understand the most important factors below.

    What’s the Interest Rate?

    The biggest thing most borrowers want to know is what interest rate they will pay. This affects not only the amount of your monthly mortgage payment, but also the amount of interest you pay over the loan’s term.

    Don’t make the mistake of jumping at the lender with the lowest interest rate, though, this is just a small piece of the puzzle. You have to put all of the factors together. Starting with the interest rate, though, you’ll have a better idea of which lenders you even want to consider.

    How Many Points do They Charge?

    Next, you’ll want to pay attention to points the lender charges. There are two ways lenders can charge points:

    • Discount points – Lenders charge these points in exchange for a lower interest rate. When a lender quotes you an interest rate, it’s important to ask if it’s with points or without points.
    • Origination points – Lenders charge origination points to make up for risky loans or to compensate themselves for loans that require a lot of work. Origination points aren’t tied to the interest rate, though.

    What’s the Lock Fee?

    Eventually you will get to the point that you want to lock the interest rate. Some lenders charge money to do this. You’ll want to know ahead of time what terms lenders have for locking an interest rate. Some charge a fee, while others allow you to lock the rate for nothing, but if you let it expire or need to extend it, they may charge you a fee.

    Click to See the Latest Mortgage Rates.

    What’s the Loan Type?

    It doesn’t pay to compare loans and lenders if they aren’t offering the same type of loan. Ask a lender point blank what type of loan they are using when providing you with a rate quote. Is it fixed or adjustable? Is it a 30, 25, 20, or 15-year term? You can’t compare too different offers – they need to be the same in order for you to figure out which one makes the most financial sense.

    What’s the Turnaround Time?

    Next, you need to know what a lender’s turnaround time is when you apply. If their turnaround time is longer than your deadline, you may want to look elsewhere. In this case, paying a little more in fees may be worth it to you if you know you can get your loan closed on time.

    What’s the Customer Service Like?

    You’ll want to know what a lender’s customer service is like as you will be dealing with them quite a bit for the next month or two. You want to make sure they promptly return your phone calls or emails and provide you with prompt answers to your questions.

    You also want to make sure the lender carefully explains everything to you and doesn’t just brush over details assuming that you understand. You are taking out one of the largest loans you’ll probably ever take out so it’s important to understand it well.

    Who Will Service the Loan?

    Last, you want to find out who will service your loan. Is it the funding lender or someone else? If it’s someone else, ask who it will be so you can do your research on them. Many lenders don’t keep the loans on their own books, so there’s a good chance your loan will be sold too.

    Comparing lenders and loan offers is a tricky process. You have to take your time and look at the big picture. Consider how much each loan will cost you over the life of the loan and go from there. If you focus on the monthly payment only, you may end up overpaying for a loan just because you didn’t focus on the lifetime costs of the loan. Once you narrow your choices down, you can ask more intricate questions of the lender to finalize your decision.

    Click Here to Get Matched With a Lender.

    Filed Under: Lenders Tagged With: choosing a mortgage lender, home lender comparison, long process timeline

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    IMPORTANT MORTGAGE DISCLOSURES:

    When inquiring about a mortgage on this site, this is not a mortgage application. Upon the completion of your inquiry, we will work hard to match you with a lender who may assist you with a mortgage application and provide mortgage product eligibility requirements for your individual situation.

    Any mortgage product that a lender may offer you will carry fees or costs including closing costs, origination points, and/or refinancing fees. In many instances, fees or costs can amount to several thousand dollars and can be due upon the origination of the mortgage credit product.

    When applying for a mortgage credit product, lenders will commonly require you to provide a valid social security number and submit to a credit check . Consumers who do not have the minimum acceptable credit required by the lender are unlikely to be approved for mortgage refinancing.

    Minimum credit ratings may vary according to lender and mortgage product. In the event that you do not qualify for a credit rating based on the required minimum credit rating, a lender may or may not introduce you to a credit counseling service or credit improvement company who may or may not be able to assist you with improving your credit for a fee.

    Copyright © Mortgage.info is not a government agency or a lender. Not affiliated with HUD, FHA, VA, FNMA or GNMA. We work hard to match you with local lenders for the mortgage you inquire about. This is not an offer to lend and we are not affiliated with your current mortgage servicer.

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