Shopping for a Mortgage Loan

Comparing home mortgages can be complicated. But you don’t need a finance degree to make an informed decision. Here are some steps to help you get there.

Look for lenders to consider:

• Locals you know and trust: “Make sure the lenders you’re comparing come from referrals from local people you know who’ve worked with them — like your friends or relatives,” advises Jeff Koch, vice president of residential lending at Draper & Kramer Mortgage Corp in Schaumburg, Ill. “Wherever you have trust established would be a good source.”
• Your real estate agent: “If you’re working with a real estate agent, find out if they have any feedback or advice on a lender or a loan officer,” recommends Jim DeMarco, branch manager and senior loan advisor at Flagstar Bank in Seattle.
• Online reviews: These can be a good starting point, DeMarco says. “If you see a lot of really good reviews, that means people are taking the time to provide them.

Meeting the Loan officer:
During your first conversation, you and the loan officer will usually ask each other questions, and the loan officer will use that information to assess your situation. That may sound cut and dried, but the meeting should be fluid based on what you’re ready to do.  Scope out the lender’s communication strategy and their process for delivering on time. Ask questions like: 

• Would you take me through the process?
• What should I expect? 
• What will I need to supply?

• What’s your communication style? Are you willing to communicate virtually?
• When would I work with you? Are you available in the evening?
• Will I be working with you or a member of your team?
• What do you think of my time frame to get to closing?
• What if any issue do you foresee being a problem?
• How long do loans you process typically take to close?
• What are some ways you could expedite the process if there’s a tight time frame?
• About what percentage of loans you work on close on time?
• How many loans have you worked on that haven’t closed or haven’t met deadlines? 
• What’s the biggest problem you’ve had with a loan and how did you fix it?

Misconception:  
Thirty-eight percent of buyers think comparing multiple mortgage offers in a short time will hurt their credit rating, according to a 2020 LendingTree survey. But as long as the lenders all pull the borrower’s credit within a couple of weeks, it’s counted as a single credit inquiry. It is not problematic if they do it within a narrow window of time.

Compare the financial information located on the loan estimate form. You’ll want to drill down to origination charges in the lender section. Make sure you’re comparing apples to apples. If one lender is offering a 30-year fixed rate at 2.875% with no lender fees and another is offering 2. 75% with $1,500 in lender fees, those are unlike products. Get the fees at the same rate to find out who’s less expensive.


Comparison shopping can get complicated. Here are six ways to simplify the process.

1. Keep Your Pool Manageable
​Mortgage shopping depends on the borrower and the personality type and how they’re work. The process can seem overwhelming. That’s why it makes sense to have a select few options to compare so borrowers can process and assimilate them.

2. Get a Fees Worksheet
The best way to compare effectively is to zero in on the fees worksheet, which the loan officer should provide. Then you can figure out just what the lender’s direct fees are, and you can make a nice, simple comparison.

3. Understand a Fees Worksheet Versus a Loan Estimate
Keep in mind that the numbers on the worksheet are estimates and not locked in. Interest rates are fluid and change daily. On the other hand, after you have a contract with a seller, the loan estimate and loan application are where the information is binding barring structural changes to the loan. Make sure the information reflects previous discussions with and disclosures by the loan officer.

4. Be Careful Interpreting Third-Party Fees
Third-party fee estimates are included on the worksheet. Two lenders could each come up with different estimates for title, escrow, or appraisal fees. But not all are negotiable. For instance, the seller chooses the title company, so the lender doesn’t control the choice or the fees. The lender could be choosing the high or low end of a range, but it’s only an estimate.

5. Think About Timing
Make sure lenders are using the same time frame for locking in pricing and that it will extend through the closing.

6. Always Apply for Loan Approval Before Finding a Property
But some lenders will allow borrowers to go through the formal underwriting process — not just preapproval — without having a property. The borrowers can get a bona fide mortgage commitment with all of the major buyer financials truly underwritten at that point. Then when borrowers make an offer, they can close more quickly.

You'll have to invest some time and effort into comparison shopping for a mortgage loan and selecting a lender and a loan officer. But your return on investment can pay off over the long haul.

Whether you want to buy or sell a home locally or globally, I can help you finding or selling your home so you can create the life you love!  ☎️ 706.530.1114 or email us.
Have a great day!
Iveth Caruso