The Benefits of Shopping for Your Mortgage Loan
One of the biggest financial decisions you’ll make is choosing a mortgage lender when buying a home. While it may be tempting to go with the first lender you find or your current bank, taking the time to shop around can really pay off, both figuratively and literally. Here are some of the key benefits of shopping for your mortgage loan.
Better Interest Rates Interest rates and fees can vary a lot between different lenders. Looking at multiple loan estimates and comparing quotes will help you find opportunities for lower rates and save money over the lifetime of your mortgage. Even a small difference of 0.25% on a 30-year loan can add up to thousands in savings.
Wider Variety of Loan Options Every lender has their own specific loan programs, products, and guidelines. One may offer better rates upfront but charge higher fees, while others may have different requirements. Shopping around gives you access to more options from both big banks and smaller lenders to find the right loan for your situation.
Improved Customer Service Not all lenders are created equal when it comes to customer service. Some are notorious for long delays and poor communication. Shopping allows you to get a feel for each lender’s level of service and responsiveness, so you can find one that treats customers well and keeps you informed.
Stronger Negotiation Position Looking at multiple lenders gives you valuable insider knowledge and strengthens your ability to negotiate. Let each lender know you are shopping rates and locking in the best deal. The competition will make lenders work harder for your business by waiving junk fees and matching better offers.
Avoiding Predatory Lending Sadly, predatory lending still exists. Shopping helps you recognize exaggerated claims, pressure tactics, or unreasonable fees that are signs of a predatory lender. Comparing options allows you to spot bad actors and find an ethical lender you can trust.
Simplifying the Process New online services allow borrowers to anonymously submit one form to multiple lenders at once to streamline receiving and comparing personalized loan options. This makes shopping around much easier than filling out numerous applications.
Getting pre-qualified by having different lenders assess your financial profile is also wise. This shows lenders you are an informed borrower and gets you accurate rates and loan amounts you qualify for. Taking the time upfront to shop and get pre-qualified will pay dividends down the road with huge mortgage savings.
