The Dangers of Rate Shopping

The Dangers of Rate Shopping

Buying a home will most likely be the largest purchase you ever make.  With that in mind, you might assume having the lowest interest rate is best, but this is not always the case.  The lowest advertised interest rate may not be your best option.  Some lenders and mortgage brokers advertise low rates but don’t inform you of all the additional points and fees that come with the mortgage.  Here are a few tips to take into consideration before rate shopping.

Rate Shopping Tip #1: Look at Points and Fees

Always ask about points, lender fees, broker fees, and settlement costs. Points are pre-paid interest that affects the quoted interest rate.  You can ask to have your points quoted as a dollar amount instead of just a percentage.  For example, on a $200,000 loan, one point would equal $2,000.

Rate Shopping Tip #2: Shop Smart

Interest rates fluctuate daily. Talk to your Loan Officer about when the best time to lock in on a rate is.  First Home Mortgage values honesty and service, so any questions you may have for your Loan Officer will be answered diligently, fairly, and in regard to your best interest. If you contact different lenders, make sure you provide each lender with the same information.  Such information will include the quality of your credit, location, type and use of your property, the size of the down payment, and/or the amount of home equity you have.

Rate Shopping Tip #3: Finding the Best Lender

Customer service may be the most important consideration when shopping for home financing. During the loan process, you should feel comfortable disclosing your financial information and asking questions. A trustworthy lender will be responsive and will assess your situation carefully to best suit your home buying needs. Make sure to choose a lender who can offer personalized options and takes the time to understand your goals.  Just remember interest rates don’t always matter.

If you have any questions or would like to get started on this home-buying journey, contact First Home Mortgage Corporation today!  We provide the mortgage you need to make “home” happen by delivering customer service that not only fulfills goals but exceeds expectations.

Related Posts

Pre-Qualification vs. Pre-Approval
Pre-Qualification vs. Pre-Approval

You’ve heard the terms pre-qualification and pre-approval, but what do they mean? They are the same thing, right? Not quite! The terms have been used interchangeably, but their true definitions differ. We’re going to break it down and explain the difference between the two. Pre-qualification The very first step to take if you are ready […]

June 09, 2021
Full Post
Steps on the journey to purchasing your dream home!
Steps on the journey to purchasing your dream home!

Get Pre-Qualified Complete a loan pre-qualification – Contact one of our loan officers to get started! Submit basic documentation – This can include pay stubs, bank statements, credit reports, and statements for any other debts or loans you might have. Your loan officer will let you know exactly what they need! Discuss what you can […]

June 04, 2021
Full Post
Federal House Financing Agency Announce New Refinance Program for Low-Income Borrowers
Federal House Financing Agency Announce New Refinance Program for Low-Income Borrowers

The FHFA has announced a new refi program to benefit low income borrowers with single family mortgages. These mortgages will be backed by Fannie Mae and Freddie Mac. This new program is designed to help those who were not in a position to take advantage of 2020’s low rates. This new option could save borrowers […]

April 29, 2021
Full Post

Connect With Us