Is it really possible to shop for a mortgage any more?
by Kabir Mahadeva NMLS 182829
E-mail me at firstname.lastname@example.org
The answer is YES, but not using the old methods of comparing rates. Today's savvy mortgage shopper should instead choose a lending source based on competence, experience, and track record.
Why can't you shop by rates? Because mortgage rates depend on publicly traded securities called Mortgage Backed Securities. The marketplace for these is extremely volatile, meaning big swings in prices for these securities which translate into big changes in rates.
Because most mortgages end up being sold to a handful of investors or lenders, rates between different lending sources may only vary slightly, if at all.
Mortgage rates depend on 26 different factors related to the transaction and borrower's financial profile. Many of these aren't established until the application and credit report have been reviewed. To get an accurate quote from a reputable lending source, you will have to complete a loan application and allow your credit history to be reviewed.
Unless you are ready to lock your rates, there is absolutely no way to compare lenders based on rates because they can change at any moment. Reputable lending sources will require you to submit a complete application before they will lock. You may also have to pay a non-refundable fee to lock.
Therefore it is more important to choose your lending source carefully. Ask your friends and realtors whom they have liked working with, and why. Don't waste time calling through the phone book or using the internet. A personal referral from a trusted adviser is the *only* way to find someone who will have the level of accountability you need to handle your situation.
Boil your list down to two or at most three people and interview them. E-mail me (email@example.com) and I'll send you the interview questions to use.
Then choose the person with whom you feel most comfortable. This is an important financial decision, so make it on the basis of trust and competence.