Home Loan Shopping Rules
To make an educated, apples-to-apples comparison on home loans we suggest using the following tips:
1. Always use a local lender. Seriously. Being able to sit down to explain or work hand-in-hand with a real person is invaluable during this key moment in your financial life. I’d even go so far as to say that here in the Casper area, having a non-local prequel can lead to nerves on an offer before a deal is even done. This is because many online mortgage companies make it easy to prequalify but pull their endorsement before the deal closes with little repercussion. Make sure you are dealing with a local lender.
2. Understand Estimates. A couple hundred dollar difference in bottom line fees on an estimate is meaningless because of the variations in how lenders calculate costs. All estimates within a couple hundred dollars either way should be considered equal when lender comparison shopping.
3. Don’t fall for fluff. Experience counts not sales pitches. You want someone who actually cares about you, your sale and the time it happens. When interviewing lenders, ask how well they hit the normal time to close and how long their underwriting process normally takes.
4. NEVER pay applications fees. You may be asked to pay a credit report fee up-front. This is OK. You will be asked to pay the appraisal fee once you agree to officially move forward with the loan. This is also OK, as long as it is AFTER they have your full application, and AFTER you have seen the Good Faith Estimate. NEVER pay non-refundable applications fees.
5. Ask the lender for a WRITTEN “Good Faith Estimate (GFE)” of settlement charges to verify if they are willing to put their pricing claims in writing.
6. COMPLETELY IGNORE any interest rate or closing cost estimate you see online. They are never accurate. You must speak to someone! Your credit history, type of loan and money down all matter to the rate so there is not one answer for all.
7. NEVER use an unknown lender who solicited you through the mail, or called you on the phone. These are by far the worst rip off, misleading, overcharging, predatory lenders that exist! I hear horror stories of people being called from their bank or others and offering a low interest refinance. The last one I reviewed would have added four years to their payoff and save them only $10/mo—the bank would make money off their origination and four years of interest! BEWARE.
We are HAPPY to review your Good Faith Estimate or give you a lender interview sheet as a courtesy anytime! We want to be on your side and make sure you understand closing costs, a GFE and most importantly avoid any predatory lending practices.
Let us help by calling today 307-234-6659!