Want to go shopping? Have you ever thought about shopping for a lower mortgage rate? If not, you may want to consider it.
If you decide to go shopping for a lower mortgage rate, one thing you do need to consider is that not all lenders share the same business practices. Some of them may lure unsuspecting borrowers to a rate, knowing completely that they cannot deliver on it. Once a loan application is made and information necessary is supplied for approval, they reveal that the rate is not available for “whatever” reason.
Those lenders are counting on the borrower wanting to get into the home because the closing date is near and they’ll compromise by accepting the higher than quoted rate.
That can be a very strong reason as to why shopping for a mortgage rate can result in savings because rates are set by individual lenders. As an apples-to-apples comparison, the terms of the mortgage being shopped should be consistent among the lender candidates.
Additional savings can also occur by not only shopping for better rates but for better terms and fees, which can vary widely among lenders.
The amount of savings can be affected not only by the difference in rates, but the size of the mortgage and the length of time borrowers expect to keep it without refinancing or selling.
- Advertised rates are generally for A++ borrowers and the determination is the lender’s based on many factors. It may be unlikely those rates are offered to you.
- A recommendation for the best lender from a friend or family member will not necessarily be the best for you.
- Instead of accepting the first offer received, shop for at least three to five offers.
- Your personal bank may be convenient however it may not offer you the best rate, terms, and fees.
- Ask if there is room to negotiate the rate or fees.
Ask your real estate professional for recommendations of several trusted lenders for you to shop a rate, terms, and fees.
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