Shopping For a Mortgage Loan

When shopping for a mortgage loan, it is important toThis question is direct and will make choosing a lender
make sure that you compare home loan offers to seemuch easier!
if you are getting the best deal. But for many homeEvery company can tell you what the lender closing
owners comparing mortgage loans is not an easycost will be at a specific rate. For example, Lender A
task. Below are some easy steps so you can do tocharges $2100 in lender cost for a rate of X% and
compare several different mortgage loan proposalsCompany B will charge $2500 in lender closing cost
and make sure you are getting the best possible homefor the same rate. When comparing these numbers, it
loan.is easy to see that the Company A is offering the
Verify that your loan originator has a Nationalbest deal!
Mortgage Licensing System NumberWhen comparing closing cost, only compare the
The first step you will need to do is make sure thatLENDER closing cost. Most mortgage lenders will
you are dealing with a licensed mortgage officer. Inestimate 3rd party charges like title company fees or
2010, both mortgage bankers and home loan brokersattorney fees and prepaid items like property taxes
have to be licensed. Each loan originator must have aand home owners insurance. These fees are
license number that is part of the National Mortgageestimated and are charged by other companies other
Licensing System (NMLS). Each loan consultant mustthan the mortgage lender. Let's use the same home
display their NMLS number on any form of marketingloan lenders in the example above and say that
materials, website, and any other advertisements. YouCompany A estimated prepaid and 3rd party fees at
should always ask a loan consultant if they have a$3500. Company B estimated these fees at $2500.
NMLS number. Finally, loan officers can only do loans inWhen you add their mortgage lender fees to the
states they have a license in. For example, if I have aclosing cost estimate, Company A is at $5600 and
mortgage license in Texas, then I can only originateCompany B is at $5000. It looks like Company B is
Texas home loans.offering the best deal, but since these are only
Compare Apples to Applesestimates, Company A is still offering the best deal
The hardest thing to do when comparing a homesince they have $400 less in LENDER fees. Think of
mortgage loan is trying to compare mortgageLENDER fees as the charge for the interest rate.
proposals from all the different lenders. The reason forThese are also the fees that the lender has control
this is that many lenders have different closing costover!
and offer different rates, but if you understand how toFinally, when comparing mortgage loans, compare like
ask the right questions, this process can be muchrate offers meaning that if you are getting a quote for
easier.a 30-year loan at 4.75%, make sure that all offers you
First, never ask the question, "What is the best rateare comparing have the same rate. Also, make sure
you can give me." This question is so open ended andyou are comparing the rate with the same mortgage
closing cost plays a major factor in the rate. The bestprogram. For example, compare FHA home loan rates
rate a home loan lender can offer you will have thewith other FHA home loan rates. You do not want to
most closing cost. When trying to compare mortgagecompare a FHA home loan with a Conventional
offers from other lenders, this can be tricky. Instead,mortgage loan since these are two different types of
you should ask the question, "What is the mortgagemortgage programs.
lender closing cost associated with a 30-year FIXEDHopefully this will help when shopping for a home
rate home loan at X%?"mortgage loan.