Comparing multiple mortgage offers for a home loan is a challenge you will face when refinancing your home.
If you are looking at multiple offers for the lowest mortgage rate, Here is what you need to know:
1.Obtain a Loan Estimate (LE).It’s a three page document required by law to be sent to you within 3 days of your application date. This document will outline your interest rate, payment and all fees associated with the acquisition of the loan.
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).
If you are still having trouble, and if you are speaking to multiple lenders, try to determine who really has your best interest in mind and ask them to help you compare your offers.
Written by Nathan Kowarsky, President, Clear Mortgage Capital 949-238-6220, [email protected]
