There is so much energy expended to find your “Dream Home”, right? So when your Realtor hands you a list of Mortgage Brokers and/ or Institutions you are relieved that this decision can be directed by your Agent. Not so Fast!
There ARE many benefits to “shopping around” & to include the On-Line Financing Companies in your evaluation process. This simple act may save you $$$ on fees and possibly even the interest rate. (By the way, your Credit Score is not negatively affected if you are shopping for a Mortgage; unlike a general Credit Inquiry)
Here are a few things to look for and tips on an internet Lender site.
1. Shop anonymously until the time you make your decision.
2. Deal only with sites that the lender will commit to or “lock in” legally on that particular day & not only the day you are contacted by the Loan Officer. (Lenders “set” their interest rates on a daily basis & some may adjust multiple times during the day) Look for sites that include wording such as- “as of” with a date and time stamp.
3. Deal only with sites that disclose not only the interest rate but the Lender’s fees referred to as “Points”. They appear as a percentage that translated to a $$$ amount. ARMS (Adjustable Rate Mortgage) should also disclose the loan’s Margin, Index & Rate Caps.
4.The price of your loan package will be determined by the Property’s Zip Code, Occupancy (Primary, 2nd Home or Investment), Loan Type, Down Payment, your Credit Score & whether you choose to waive Escrow. If the numbers you are given do not include the adjustments for the above factors-just move on.
This article was summarized from an article by Jack Guttentag, PH.D. Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania.
Additional Information may be found online @ www.mtgprofessor.com
“How effectively can you shop at Multi-Lender Web Sites”