Comparing Mortgages: Why Typical Rate Shopping Is Subjective

As mortgage rates remain favorable, more consumers are rate savvy and rightfully so. Everybody wants to make sure they’re getting a competitive combination of rate and  associated costs in their purchase or refinance loan. Comparing mortgages, doing true apples to apples comparisons can be quite time-consuming and nonetheless labor-intensive.

Typical Way Consumers Shop Mortgages

Most consumers contact 2 to 3 different mortgage lenders, provide a few tidbits of information such as loan amount, occupancy, approximate home value, loan program desired and goals, lender provides accurate rate and cost information based on real time data. Most lenders on any given day are .375% of a rate against the competition (Any more .375% in rate, is a indication the lender is pricing outside of the market- remember all lenders have access to the same rates, same bond market, translation: level playing field).

*Mortgage Tip: There is no law, guideline, or regulation that mandates a lender must provide the lowest interest rate to the consumer. It is up to the consumer to decide ultimately to decide what is in their best interest. This becomes important because consumers feel they are getting the best interest rate and cost financing when in some cases, that may not be not be so. If a lender is dramatically lower than the competition, that’s another sign about the old saying if it’s too good to be true it usually is.

Better Way To Compare Mortgages

Plan on comparing a few different mortgage offers?

Read On…..

During discovery process of deciding which lender has what costs, what rate, focus on the lender offering these strong service oriented characteristics which will ultimately become crucial enuring your loan actually closes.

  • Responsiveness-How quickly does each lender respond to you? The more focused you are on interest rate, the more important this becomes especially deciding on when to lock the interest rate knowing the interest rates change multiple times per day, everyday.
  • Knowledgeable-Does the loan professional know their guidelines? The screws on mortgage lending standards have been tightened significantly as recently as 2012. Lending guidelines dictate how you can borrow.
  • Articulate-Is the lender able to clearly articulate the details? Having a solid understanding of how the loan is being put together, structured and subsequently handled provides for a smoother process and a faster close of escrow and yes, even a better interest rate and payment over time.
  • Qualifying-Do you understand how lender is qualifying you? For most people, having an understanding of how the numbers come together is a trust factor in determining which mortgage company they’re going to work with. Knowledge is power. Wouldn’t you want to understand the mechanism of how the loan comes together?
  • Rate/Pricing- While the lender is under no obligation to provide you the lowest cost mortgage, they should give you some indication of wanting your future business, so they will make sure the mortgage rate quote offer provided is quite “competitive.”

 Why comparing mortgages on “rate” and “cost” alone is not a formula for success.

The internet, television, radio, newspaper, mortgage rates and home loan programs are advertised everywhere. If you receive an offer substantially lower than the competition you otherwise compared against, yet you cannot actually get a hold of anyone, the communication is weak and you keep having get more and more  financial documentation, that does not make for a successful experience, let alone provide for any best pricing possibilities. Such instances make the transaction not only frustrating, but also take longer which can actually make the cost rise due to rate lock extension which prolong rate locked as the market continues to move.

By placing a primary emphasis on the service related qualities, it will be easier to make the most informed decision on rate and loan program.

Mortgage Tip:  During your information gathering, ask the lender for credible references to validate their claims of their ability to deliver for you. This makes them accountable for actually providing competitive rates and fees as well as service that you can rely on to actually get your loan closed.

If you are thinking about taking out a mortgage and would like some competitive complementary no obligation numbers, we can help. Contact us today!

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When buying a home, it’s natural to want the lowest mortgage rate possible. But sometimes, chasing a slightly better rate from another lender—especially after your offer has already been accepted—can backfire in a big way. Let’s walk through a real-world scenario. You’ve got an offer accepted on a house. You’re working with a lender who has you approved, documents in underwriting, and a 21-day close of escrow in place. Everything is moving forward. Then you hear from another lender offering a rate that’s 0.25% lower, with slightly better closing costs. It’s tempting. But before you make a jump, here’s what you need to consider. Switching Lenders Comes with Time Costs When you pivot to a new lender mid-contract, they’ll need to: Re-underwrite your entire loan, Order a new appraisal, Disclose and sign new loan documents, Submit the file for final loan approval, Schedule and fund closing—all over again. This doesn’t happen overnight. Even in ideal circumstances, the new lender is likely going to need at least 25–30 days to close. If you’re in a fast-moving or competitive market, this is a real problem. Most sellers won’t grant a contract extension just because you’re switching lenders. So, what happens next? A Contract Extension Can Jeopardize Your Deal Asking for a contract extension means the seller must agree to delay closing. But that delay introduces risk—especially if the seller has backup offers or simply wants certainty. They may not grant the extension. Or worse, they could cancel the deal outright and take another buyer’s offer. Even if the seller agrees to extend, your earnest money and negotiation power could take a hit. And for what? A slightly lower rate that might save you $50 to $75 a month? Mortgage Rates Aren’t as Far Apart as You Think Here’s the truth: all mortgage lenders get their money from the same place—the bond market. The pricing differences between lenders usually range from 0.125% to 0.25% in rate on any given day. If one lender seems to be offering dramatically better pricing, the first thing you should ask is: How? Head over to FreddieMac.com and check the average 30-year fixed rate posted weekly. This is one of the most reliable benchmarks for where rates truly stand in the market. If a lender is quoting you a rate that’s well below that average, ask for the details: Are they charging extra points? Is this a teaser rate with a prepayment penalty? Is it based on a different loan product or risky structure? Often, what sounds “too good to be true”… is. Consider the Bigger Picture Think long-term. If you’re financing $600,000, a 0.25% lower rate may reduce your payment by roughly $75/month. But what if you lose the house and have to start over? That monthly savings doesn’t mean much if you’re outbid on your dream home or lose your deposit. Also, remember: you’re not going to keep this rate forever. Today’s homebuyers typically refinance when rates drop by about 0.75% or more. So if rates fall within the next year or two, you’ll likely be refinancing anyway. Instead of paying extra points now or risking the entire deal for a minor monthly savings, it may be better to accept a slightly higher rate—knowing you’ll refinance when the time is right. The Real Risk Isn’t the Rate—It’s the Delay When shopping for a home loan, don’t just ask, “What’s your rate?” Ask: Can you close on time? Is this rate sustainable or based on hidden costs? Will switching lenders delay or jeopardize my contract? A home purchase contract is a binding agreement between you and the seller to perform within a set timeframe. If you can’t meet those dates because you're chasing a slightly better rate elsewhere, you may want to reconsider if now is the right time to buy. Final Thoughts Yes, interest rates matter. But execution matters more. Before making a switch mid-transaction, talk to your lender. Have an honest conversation about pricing, timelines, and strategy. You might find that staying the course, securing the house, and planning to refinance later offers a better path to financial security. Want to Know Your Options? Let’s compare rates and strategies the smart way—without risking your dream home. 👉 Click here to get a custom rate quote today.

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1 Comments

  1. […] also prevents a practice known as “double apping”  wherein a borrower looking to compare two separate mortgage companies tries to use the same appraisal and transfer it from one lender to another lender. This used to be […]



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