Here's an answer to a mortgage loan question that many home shoppers would like to understand. >>>How to make comparisons among different lenders? Rarely will you ever see lenders publish their rates and fees. This is because rates fluctuate daily, and lender fees vary depending on loan type and program, including individual credit scores. Lender A may have a better offer this morning, but Lender B in the afternoon.
When making lender comparisons, it's very important to compare the APR and the interest rate together, on the same day of the week, and same time of day (morning or afternoon). The loan type must also be the same among each lender. And, generally speaking, it doesn't hurt your credit if you have multiple lenders pull a credit report within a 30 day period of time.
The following content is courtesy of my AR associate, Matt Brady.
You’ve probably been through this before:
You get a personalized letter in the mail from a lender offering you an insanely low interest rate for a mortgage, or you see an online ad offering something similar and with an offer of no closing costs. But when you inquire with a loan officer at your bank, the rate they offer you - an existing customer - doesn’t match up.
Why is that?
A couple of reasons:
When it comes to interest rates, not every broker or lender is on equal footing. Larger lenders tend to have access to better rates because they may have more funding available for loans from investors.
But this also doesn’t necessarily mean that the larger the lender the better deal you’ll receive. Larger banks and lenders also tend to have more operating costs, which can mean higher fees for the borrower.
The other thing that’s vital to understand when shopping for a loan is the difference between an advertisement and a real loan offer.
Unfortunately, there’s a lot of bait-and-switch advertising in our industry. Many lenders use attractive ads as a way to get you in the door. But more often than not, the interest rates being offered are only for “qualified borrowers,” which essentially means that 99.5% of borrowers aren’t going to be able to get it.
You may need a perfect credit score, 20% or more down payment, have income within a certain bracket, and the list goes on.
The important thing is to compare interest rates and loan offers you receive that are tailored to your situation. This means you’ve provided some information about your income, your credit history, assets and debt, and the home you’re looking to buy or refinance before the lender offered you an interest rate.