Most lenders do not expect you to shop around for quotes. They plan to persuade you to stay with them, because you trust them. Or, if a realtor referred you to a lender, the realtor expects you to trust they know and trust the lender, so you should too. Shouldn’t you always shop around, so you can make sure you are receiving the best deal possible. But, comparing quotes is very difficult and time consuming, since every lender seems to have different fees, rates and quoting styles. Bottom line, the lenders don’t tell you to request the quote on the same day and time. Normally lenders do not change their daily pricing unless the market changes by .125% – .25%. But, because rates move minute by minute, you should request quotes from all the lenders on the same day and all within approximately 1 hour of each other. So, you can make sure you are comparing rates, points, fees and payments on a level playing field.
Every lender promotes they have the best rates possible. Shocker!! But, there are always differences. A client of mine was refinancing, called his current lender, only to find out their quote was .50% higher than the lender I suggested. How can that be? Here are a few simple steps to follow:
- Be prepared. Gather your information ahead of time, such as loan amount, property value, term, etc.
- Go online to request your credit score at http://www.freecreditreport.com/ I suggest paying $1, which will include your credit score.
- Find 3 lenders you trust, …well think you might trust the most. My belief is you don’t know who you can trust until you meet them and get to know them. A salesman is ……well, you know, salesman. They are best at selling you things. So, research them first. See my blog researching lenders.
- Should you use online lenders? Only if you are willing to give-up personalized service for price.
- Should you use a friends referral? I suggest always requesting a quote from a friend, but always compare it to several other lenders. Just because your friend trusted them, doesn’t mean they received competitive pricing or that you will receive competitive pricing.
- Request quotes on the same day and time. Rates change by the minute. This is very important.
Now the challenge is to compare rates, fees, points & payments. Do you know what is negotiable? Most lenders don’t explain this either. Do you trust your lender to look out for your best interests? It is a profit transaction for them. This is what I do, and the most important step. Every lender charges different fees in different ways. I also know very trustworthy lenders that I have worked with for many years. One of the reasons my suggested lenders can offer better pricing is because they do not have to advertise for my leads, saving them $1,000s. In addition, they know my clients are extremely well educated in the loan process, because I look out for their best interests. If you have questions, contact me.