How do I shop for a mortgage?

How do I shop for a mortgage?
Sammamish Mortgage
Post Date: Updated:

Are you ready to buy a home? Getting a mortgage should be a carefully thought out process. Your mortgage can differ by tens of thousands over the term of your loan based on what lender you select, so choose wisely.

Don’t Overpay for Your Mortgage!

Many homebuyers – especially first-time homebuyers – simply go to their local bank where they have a checking account or go with whoever their real estate agent referred them to to get their home loan. This can lead to significantly overpaying for your mortgage.

Many real estate agents don’t refer based on a Loan Officer’s rates, products or advice, but instead refer based on personal friendships or business arrangements – which include co-marketing agreements. Don’t pay for someone’s kickback!

Most banks also do not look at various lenders and aggregators to see who will provide the best terms for your loan but instead rely only on their own product offerings. This can lead to you paying a higher rate and fees than you could find elsewhere.

Others use brokers, thinking that will save them money, but end up paying more due to extra fees and charges, or hidden increases in rate like undisclosed points that aren’t revealed when the base rate is advertised. While this channel can save you money if you find the right broker, it can also lead to lots of problems and added costs if you don’t choose wisely.

These differences can mean you end up with a home loan that will cost you tens of thousands more over its term than it would have if you’d taken the time to really shop for a mortgage the way you would any other high ticket item.

Shopping Around for Your Mortgage

All the savvy in the world won’t help you if you’re not working with professional, experienced Loan Officers (LOs) who are motivated to help you find the best loan product possible.

Pure online lenders can be a good option for a savvy borrower as they often provide competitive rates and fees; however, it’s important to be confident with your contact and know who will assist you if issues come up during the transaction. The last thing you want is to have an urgent matter that needs to be addressed, only to get stuck with a general customer support number staffed by inexperienced personnel as your only lifeline.

When you use your local bank, you can also end up with a staff member who is in over their head; probably because they do a few home loans a month lumped in with all of their other responsibilities.

When you shop for your mortgage through a dedicated mortgage bank, you get a Loan Officer who is dedicated to helping you navigate the process from start to finish and beyond. Choosing a mortgage bank that has helpful online tools and technology can make the loan process easier without sacrificing advice from a knowledgeable and experienced Loan Officer.

Items You Should Ask About Up Front

There are multiple items that can help you determine if a loan product is right for you. By asking your LO about these things, and lining up their answers with the answers from other loan sources, you can compare across the board and see who really has the best mortgage loan offer:

  • What is the base interest rate without points for my situation?
  • What points are offered and what are the terms?
  • What additional fees are charged?
  • Are any of these fees negotiable?
  • Do you have lender credit options to reduce my costs?
  • What is the estimated total for closing costs?
  • What type of down payment is required?
  • Will my loan require private mortgage insurance (PMI)?
  • Can I lock my rate?
  • How long between finding a home to buy and my closing date?
  • How can I get preapproved?

It is also highly recommended that you work with a lender that is transparent with the rates they have available online. Can you check the current rate through their website? If not, why – and what are they hiding? Technology these days is readily available for mortgage companies to provide custom pricing for consumers without the need for Loan Officer involvement. The only question is why some lenders make it difficult to see what rates they offer.

This is especially important when purchasing a new home. Most of the time you won’t have a property selected when you start the preapproval process, which means you can’t lock a rate.

Some lenders know this and will quote you a low upfront rate only to increase the rate when you’re ready to lock. Posting rates online makes this difficult as the consumer can see what rate the lender is advertising at all times.

Finally, prior to approaching lenders, check your credit score and pull a free copy of your report  so you can avoid unhappy surprises. The time to fix credit issues is before you start the loan application process.

Shopping for a mortgage takes a little bit of time, but it’s well worth it when you secure the best mortgage loan product for your situation. This can save you an enormous amount of money in the long run and help you make the most of your home buying experience.

Today’s Mortgage Rates

Your Sammamish Mortgage Loan Officer Can Help You Start the Preapproval Process Today!

We’ve fine-tuned the preapproval process to make it one of the easiest experiences you’ll have in the whole home buying process. Buying a home should be fun and exciting, not stressful. Get preapproved today!

Sammamish Mortgage has been in business since 1992, and has assisted many home buyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon and Washington.

Contact us if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.

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