How to get the lowest rate on my mortgage

5 min read   •   Jan 5th, 2020 - 10:17

How to get the lowest rate on my mortgage

Nathan Kowarsky

Written by

Nathan Kowarsky

Every mortgage company under sun claims to have the lowest rates. But who really has the lowest rates? It’s hard to tell with all the clever ads and fast talking salespeople, but I will break down how it really works in this quick article:


Here's how it usually ranks: in order from highest rates to lowest rates:


1. Big banks (Bank of America, Wells Fargo etc)

2. Mortgage Servicing Companies (Mr. Cooper, etc)

3. Direct Lenders/Retail (Quicken Loans, loanDepot, American Financial Network etc)

4. Credit Unions (Navy Federal, Schools First etc)

5. Mortgage Brokers/Wholesale Brokers


There are several reasons why the big banks and retail direct lenders charge more:


1. Familiarity/Comfort – Big banks can get away with charging more because some people will always just feel more comfortable doing business in the bank branch atmosphere.On top of them being aware that they can charge more for this service, they also need to charge more to cover the large infrastructure expenses associated with running a nationwide brick and mortar operation.

2. Psychological impression – Mortgage servicing companies charge a premium because most consumers believe that they will get a better deal because they are staying with their existing company.The truth is that the company you are currently making your mortgage payment to is most likely a collection company who is working on behalf of the actual holder of your mortgage which is usually Fannie Mae, Freddie Mac, or Ginnie Mae. In fact, I worked at a mortgage servicing company who I won’t mention here and I was floored when I learned that we were given two rate sheets. One for our existing customers and another rate sheet for new customers who management considered more likely to shop around (a full .25%-.375% higher rate).

3. Name recognition – Large direct lenders spend millions of dollars every month to build up a brand name for themselves including expensive television ads, online campaigns, even going as far as to purchase entire sports arenas to build brand awareness.In addition to this, they run very inefficient operations with low skill level staff which racks high training and attrition costs.They need to make up for this by charging very high margins to pay for these expenses putting their rates significantly higher than the wholesale rates that are available to savvy rate shoppers.


How to compare your offers to ensure you are getting the best deal:


1.Obtain a Loan Estimate (LE).It’s a three page document required to be sent to you within 3 days of your application date.

2.Look specifically at these line items: D and J.“D” is your total cost to obtain the loan without any prepaid items and “J” is any credit being issued to you.Ignore the other figures on this document for the purposes of comparing one offer against another. D minus J is the total you are spending in fees to obtain the offered interest rate.

3.Use the same rate for all lenders you are comparing.If you are comparing a 4.5% at Lender A, then make sure you are comparing at 4.5% and Lender B and C, then it’s a simple as using D minus J.and finding who is offering the best terms at that given rate.

4.Make sure that all the lenders you are comparing are using the same criteria to generate your offer including: credit score, estimated home value, and loan purpose (purchase/refi/cash out).


Written by Nathan Kowarsky, President, Clear Mortgage Capital 949-238-6220. [email protected]. All of the information contained in article is based on the opinion of Nathan and firsthand knowledge obtained during his 11 years of experience in the industry.

Nathan Kowarsky

Nathan Kowarsky

CEO NMLS: 294599

As CEO, Nathan understands the needs of his clients, and creates a plan to meet them. It’s that intuitive sense – intersecting with his deep expertise – that drives results.

During the course of his career, Nathan has funded more than 7,000 home loans. It is based on that knowledge that he walks clients through each step of the process, and trains his staff in the same standards and methodologies.

Nathan’s philosophy is straightforward: professionalism and competency require integrity and honesty. Those principles infuse the leadership he brings to Clear Mortgage Capital (CMC). Positioned as a subject matter expert, and acknowledged as an industry leader, Nathan understands that growth is not sustainable without delivering quality service and actively shaping CMC’s corporate culture.

In May 2022, Nathan received the 2022 Visionary Innovation award from the Association of Independent Mortgage Experts.   Following suit, in October 2022, LA Times awarded Nathan as 2022 OC Visionary in the finance/banking category.   Nathan has also been featured on ABC7 LA as a subject matter expert, commenting on recent market conditions. 

Prior to founding CMC, Nathan spent four years as President of E Capital Mortgage. During that time he oversaw over 700% growth. Previously, Nathan served as a senior mortgage banker, loan officer, and trainer for several industry leaders, including LendingTree, Nationstar Mortgage (now Mr. Cooper), and loanDepot. He holds a Bachelor’s Degree in Business Administration and is affiliated with the California Bureau of Real Estate and Orange County Association of Realtors. Recently, Scotsman Guide ranked Nathan among the Top 10 mortgage lenders in Irvine, California.

See Nathan's reviews here:

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