| SHOPPING AROUND... |
| 1. IF IT SEEMS TOO GOOD TO BE TRUE...IT PROBABLY IS! But you didn't really need us to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds unbelieveable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate? 2. YOU GET WHAT YOU PAY FOR. If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case, expect very little advice, experience and personal service. Worse case, expect that you may not close at all. All too often, you don't know until it's too late that cheapest isn't best. Just remember that if you've heard any horror stories from family members, friends or coworkers about missed lcosing dates or big surprises at the last minute on interest rate or costs...these are often due to working with discount or internet lenders who may have a serious lack of experience or integrety. Most imporantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. 3. MAKE CORRECT COMPARISONS. When looking at estimates, don't simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. Make sure lender fees are not "hidden" down amongst the title, escrow or other third party fees. A lender is repsonsible for quoting the other fees involved with a mortgage loan, but since they are third party fees, they are often under-quoted up front by a lender to make their bottom line appear lower. Lenders who do this believe that consumers are not educated to NOT simply look at the bottom line! APR is easily manipulated as well and unfortunately, is worthless as a tool of comparison. Often times, estimates look different from lender to lender. If you need help, once you done shopping, to compare and review good faith estimate, please contact me. 4. INTEREST RATES AND CLOSING COSTS GO HAND IN HAND. This means that you can have any interest rate you want -- but you may pay more incosts if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees or not fees at all, but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A CMPS lender will be able to offer the best advice and options in the terms of the balance between interest rate and closing costs that correctly fits your personal goals. 5. INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY. If you are comparing lender rates and fees, this is a moving target on an hourly basis. For example, if you ahve two lenders that you just can't decide between and want a quote from each -- you must get this quote at the exact time on the exact same day with the exact same terms or it will not be an accurate comparison. You must also know the length of the lock you are looking for since longer rate locks typically have slightly higher rates. |
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