If you are in the process of applying for a mortgage loan you can save yourself a lot of money by comparison shopping loan offers. Many homebuyers make the mistake of taking the first mortgage offer they are approved for without comparison shopping at all. If you do this, chances are you will overpay thousands of dollars for you new mortgage.
When you comparison shop it is important to shop from a variety of mortgage lenders including banks, credit unions, local mortgage companies, online mortgage lenders and mortgage brokers. Comparing offers from all of these lenders will not only help you find the best mortgage offer but show you what fair fees and rates are.
Different mortgage lenders all charge different rates for the same homebuyer. If you solicit offers from five different lenders you can be sure the offers you receive will all be different. Your task is to evaluate the offers you receive and choose the best one. When you make this comparison it is important to compare all aspects of the loan offers, not just the interest rates. Many people use the Annual Percentage Rate when comparing mortgage offers; this is a good starting place, but it does not give you enough information to make an informed decision.
In order to make an informed decision as to which mortgage offer is best you need to use the Good Faith Estimate. The Good Faith Estimate is a standardized list of expenses mortgage lenders are required by law to provide you with upon receipt of your mortgage application. This document lists all of the expenses including lender fees, points, legal fees, administrative fees, and closing costs along with who they are being paid. Compare every aspect of this Good Faith Estimate and you will be able to determine which mortgage is the better offer. You can learn more about choosing the best mortgage offer including common mistakes to avoid by registering for our free mortgage guidebook: “Five Things You Need to Know About Your Mortgage.”