Selecting the right mortgage lender is a big decision—be sure you’re getting the best home interest rate and services.
It’s hard to know which mortgage lender to select when the options seem never-ending. Understand why mortgage rates vary by lender and how to select the right lender for your situation.
Why do Mortgage Rates Vary by Lender?
While interest rates are determined by national and world market forces the different interest rates offered between lenders depends on a couple of key factors. Here are some things to consider:
Lender Overhead Costs
The lender’s overhead cost structure is a big factor in determining what rates they can offer. Lenders who contain cost and keep their overhead low have the ability to offer better rates and/or closing costs. Tip: Advertising costs can often be the largest overhead expense for a lender. So if you see a lot of TV commercials or hear a lot of radio ads – just remember who is really paying for these expensive advertisements.
Closing cost are directly associated with the home interest rate being offered. A lender may have a lower rate that is disguised by higher closing cost. This means that you are effectively paying for the lower rate and this may not be in your best interest. Tip: The annual percentage rate (APR) is an underutilized tool to determine if there is hidden cost contained in the rate that is quoted. Compare the APR as well as the interest rate to get a more complete picture of the combined rate and closing costs.
Inaccurate Mortgage Rate Quoting
Inaccurate rate quoting can make it appear that a lender’s rate is lower than other lenders and maybe even lower than the overall market as a whole. This should be a caution flag for you because lenders are usually within an eighth or quarter of one percent of each other and if one lender’s rate stands out from all the others it may be a misquote. Tip: To accurately quote an interest rate, a lender will need to know your complete credit profile as well as the details of your proposed loan structure. If they don’t ask you for this information, you likely are not receiving an accurate quote.
Lender Staff Variations
Sometimes cost containment to a lender means cutting staff and hiring unqualified mortgage bankers and this can lead to a long and frustrating process that could actually cost you more in the end. Tip: To avoid being a victim of a long and stressful process look at previous customer reviews posted on independent websites to see what other customers experienced.
Tips for Choosing the Right Mortgage Lender
Ask for Referrals and Testimonials
When selecting a mortgage lender, do some research by asking friends and family in your area for referrals and their overall experience with the home loan process. Once you narrowed down your list of potential lenders, ask those lenders for testimonials. Compare how your home loan priorities were handled for previous clients. Homesite Mortgage is happy to offer you testimonials of borrowers we’ve worked with in the past. If you have any additional questions about home loans, contact us today.
Prioritize Your Home Loan Needs
Every mortgage lender is different. Some lenders advertise their speed for closing loans, but it likely comes at the expense of quality customer service. Some lenders may be known for great customer service, but their rates are higher. Make a list of what’s most important to you in selecting a lender. Homesite Mortgage keeps the all the qualities you want in a lender. We’re a firm that’s large enough to offer a vast list of financing solutions, but small enough to keep rates low and customer service high.
Ensure the Loan You Need is Available
If you are looking for something other than a conventional loan, be sure that the lenders you’re considering offer the loan you need. With so many loan options available, clue into which loan is best suited for your needs, and research how much experience your lender has handling the type of loan you want. Homesite Mortgage offers conventional, FHA, VA, USDA, and jumbo home loans.
Each lender has different values—choose the lender that delivers on their promises.
At Homesite Mortgage, we know that not every lender keeps your best interests in mind. That’s why we’re committed to prioritizing your needs in every decision through the home mortgage process—including offering you the best available interest rates. That’s the Homesite Mortgage promise.
Have a Question or Want to Talk about Locking in the Lowest Home Interest Rate?