As a lender that made it through the Financial Crisis of 2007-2008, we know that doing the right thing for your clients should be your ultimate priority. As a lender that focuses on experience and customer service, we believe that it is our job to educate people on all their options.
As you shop for different lenders, you will notice a difference in interest rates. While this is a good indication of how much you are paying for a mortgage, it isn’t the only cost to look at.
Don’t be afraid to ask for the origination fees from your lender. This fee is standard across all lenders, but the cost can vary from lender to lender. Someone unwilling to disclose this information upfront is not someone you will want to commit to.
Another “hidden cost” can be any discount points you have to buy to get a lower interest rate. Lenders have the option of offering lower interest rates than their competitors. Still, these interest rates have been lowered by fees the lender charges the borrower at closing. It can make sense to use discount points, but your lender should show you what your “break-even” point is.
You will also want to look at other costs that won’t show up on your loan estimates, such as time wasted and moving services used. Suppose you use a lender that is cheaper but inexperienced. In that case, you could spend hours collecting documents and even miss contracted deadlines. When you look at your loan’s cost, you must remember that you are paying for an advisor, not just a loan. Make sure your lender is experienced.
The most important thing to remember when shopping for a lender is to find someone you can trust. Many “low-interest rate” lenders use sneaky tactics to get you in the door. They offer low-interest rates that have been lowered by discount points and are scenarios for top-tier borrowers. These get you in the door, but you aren’t getting the deal they promised when you submit all your documentation. Their hope is that you won’t go somewhere else.
If you are looking to speak with an honest lender who will pull back the curtains on mortgage lending, click here. Our Summit Loan Officers love to educate borrowers and make sure they understand precisely what they are getting.
