Everyone wants the best rates, but knowing how to rate shop properly takes a little knowhow. Here are a few things to consider:
1.) Shop the lender's rate on the same day. Rates can change daily, so Lender A may beat Lender B on a good day, and vice versa.
2.) Don't just ask for the lender's rates, ask for their fees (discount points). Many fees are out of the lender's control since they're third party fees (escrow fees, title fees, HOA transfer fees, appraisal, etc.). These are closing costs; you'll pay this regardless of what lender you go to, and the lender has no control over these fees. But, it's important to know how many points your lender will charge you, as well as their rate.
3.) Confirm the loan lock period. A loan lock tells you how long your quoted rate is good for. The shorter the lock period, the cheaper it will be for you, and vice versa. So just be sure you're comparing apples to apples.
4.) Confirm the loan program is the same. Because rates vary depending on your loan program, just be sure you're comparing the same program to the same program. For example, financing a condo is generally more expensive than rates quoted for a single family home, depending on your down payment. Similarly the rate for a VA loan will likely differ from a conventional conforming loan. Again, apples to apples.
Don't be afraid to tell your lender that you're shopping rates. In fact, it may be helpful to send them the loan cost illustration of their competing company to give them an opportunity to match or better your offer, ultimately getting you the best deal.
Questions? For more info, call Shaila at 808-741-7155 or email shaila@hawaiihe.com. Hawaii Homes & Estates LLC. License No: RB-20456.
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