Tuesday, March 10, 2009

Shopping for a Mortgage

This last week I have started to talk with lenders about a mortgage. I used Lending Tree and I also asked friends to refer me to their banks/brokers.

It has been an interesting process so far. I have received four responses and none of them are exactly alike. There are 30 year conventional loans, loans with origination fees, FHA loans, etc.

But, what I've learned a few things.

First, some brokers and lenders can get lower rates than others. Period.
I compared a conventional bank's rates for the same day to another lender's and saw a .375% difference. That is money - my money - and I care. If you can't get me the lowest rate, we probably won't play ball.

Second, rates change quickly (especially in this market).
If you have to get quotes, do yourself a favor and tell the lender, I would like to get a good faith estimate based on interest rates current at (date and time). That way, you can see what rates all of the places have, side by side. If you get some quotes one day, and then a few more a couple days later, the market may have changed enough that the rates are different for all of the lenders.

Third, the lender's fees are what you are really going to be comparing (right after the mortgage type, if you have points or origination fees).
This is the place on the estimate is referred to as the 800's. (All of the lenders fees fall onto lines in the 800 numbering range.) One lender might have fees of $1120 total, bottom line. Another might have fees of $1650. The only difference is that one is taking a bigger commission for themselves. Keep your good faith estimate, they should stick pretty close to these charges.

And last, don't be afraid to ask.
Ask questions, even if they make you uncomfortable. Ask what this fee is, and what exactly it's for. You will probably get an honest answer. If it's easier for you, I would recommend emailing the lender, so you can phrase things very nicely.

Wait, this will be last thing. If a lender doesn't have the right kind of customer service attitude - dump them.
There is simply no reason, especially in this market, for a person in a customer service oriented job to not offer good customer service. I don't like when people assume I know nothing or provide a half-assed quote because they can't be bothered.

The players so far in my quest for quotes are:
Cherry Creek Mortgage Corporation
Bank of the West
RMC Vanguard Mortgage Corporation
Southwest Direct Mortgage

Joining the game soon:

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