Do NOT Shop for a Lender – Here’s What You Need to Do Instead

Introduction

When it comes to securing a mortgage, many homebuyers make the mistake of thinking that shopping for a lender is all about getting the lowest rate. While interest rates are important, focusing solely on that one factor could cost you thousands of dollars and lead to unnecessary headaches...

Why the Lowest Rate Isn’t Everything

The Hidden Costs of Chasing the Lowest Rate

• Box A Fees: Some lenders offer an attractive rate but load up fees in Box A.
• Loan Lock Issues: Some lenders quote a low rate but don’t actually lock it in.
• Bait-and-Switch Tactics: A lender may promise a low rate only to increase fees later.

The Role of Service and Expertise

Choosing a lender isn’t just about numbers—it’s about service. A great lender will educate you on all available options and help you navigate complex loan scenarios.

How to Compare Lenders the Right Way

Step 1: Understand What Matters

Instead of just asking, “What’s your best rate?” ask questions like:

• What are the total closing costs, including Box A fees?
• Is this rate locked, and if so, for how long?
• What’s the estimated time to close?

Step 2: Talk to the Right Mix of Lenders

Speak to at least two to three lenders from different categories: mortgage brokers, direct lenders, and online lenders.

Step 3: Get Everything in Writing

Insist on receiving a loan estimate or fee worksheet in writing.

Step 4: Do It All Within a Short Window

Mortgage rates fluctuate daily. For the most accurate comparison, collect all lender estimates within the same day or two.

The Role of a Mortgage Broker

A professional mortgage broker shops for you and compares multiple lenders on your behalf.

Red Flags to Watch Out For

• Pushy Sales Tactics: If a lender pressures you to sign quickly, that’s a red flag.
• Lack of Transparency: If a lender refuses to provide written estimates, walk away.

Conclusion

Instead of blindly shopping for the lowest rate, focus on finding a lender who provides the best overall value.

Call to Action

If you’re looking for a trusted mortgage professional, contact us today or check out our recommended lenders.