How to Compare Online Mortgage Offers

If you have completed an online "rate quote," you probably ended up getting dozens of telephone calls and emails. Are you overwhelmed with all of the offers, and how different they may seem? Here's how to begin to sort through it all.

Steps

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    Complete mortgage quote forms, but know what you are getting into. When you complete an online mortgage quote form, you are essentially asking the mortgage world to contact you, and oh boy, will you be contacted. Most inquiries are aggregated by lead providers and sold to mortgage bankers and brokers 4-10 times.
    • While the phone calls and emails that are a result of this action are sometimes overwhelming, this is essential to gathering the information. Stay calm, and ask questions, take control of the conversations.
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    When you receive a phone call to discuss your request, be detailed and honest about your credit profile, debts, assets, and condition of your home. This is important so as to receive offers that are specific to your situation.
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    Make sure you compare "apples to apples." The new laws make it much more difficult. Asking for a Good Faith Estimate (GFE) is not really going to help you any longer as it simply lumps the fees into a few topic areas.
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    Ask for a "written detail of all of the fees associated with this transaction, the current interest rate, and a breakdown of the principal and interest payment". Use this exact verbiage to get what you want.
    • If they tell you that they cannot do that because they will be held to those fees, ask them to simply write you an email and detail the fees in the body.
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    Also ask them to write in the same email, the answers to these questions:
    • When can I lock my rate in? You need to know because they could be quoting an artificially low rate to get you to commit.
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    Is this rate good all day today? You need to know so when you make your mind up and call them back, it will be available. Give them the impression you will be calling them back today with a decision to get them to put their most aggressive offer forward.
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    How long is the rate good for if I lock today? To put it another way, what is the lock term? You need to ask this because if you cannot get the loan closed within that time period, you may lose the rate. If they tell you 30 days or fewer, make them put in writing that they are confident that they can close and fund the loan within that time period.
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    Is there a lock fee, or a fee that needs to be paid (appraisal) when I lock? if so how much?
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    When you have all of these offers you can compare apples to apples, compare the fees and rates, and choose what you want most. In some cases your rates may be lower and fees higher or vice versa. It is up to you to determine what is more important.
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    Consider what kind of institution they are. Are they a bank, a mortgage banker or a broker. This is important because you may need to give them money up front, and you need to feel comfortable with the firm being around when you are ready to close.
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    Ask them how long the firm has been in business. Ask what the firm's licensed name is so that you can look them up online. You can look in Google under the company name, and "complaints".
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    Be prepared to make a decision and stick with it. A serious mortgage broker should extend his or her best offer to a serious shopper, and doing the above qualifies you as serious.

Tips

  • Do not get frustrated.
  • Have your questions ready, and make them answer them in writing.
  • Do not commit until you get at least 3 offers that are presented exactly as you asked.
  • Stick with your decision. You are putting their feet to the fire. If they perform, you will get the right offer and company combination.

Article Info

Categories: Real Estate