The 5-Point Plan When Shopping for a Mortgage

The 5-Point Plan When Shopping for a Mortgage

If you’re shopping for a mortgage, you may have noticed that you started getting a lot of calls and mail from mortgage companies.

You may be wondering how they knew you were in the market for a mortgage – especially if you’ve talked to only one lender. Here’s a little secret that many consumers don’t know:

When a mortgage company pulls your credit, this sets off what’s called a trigger at the credit bureau. Based on this trigger, THE CREDIT BUREAU (not the mortgage company) sells your information to trigger companies who then “unleash the hounds” in an attempt to steal your business away from the mortgage company you first spoke with.

We’ve written other blog posts about this practice, so I will not go into detail here. But, be sure to read, Triggers: A Legal Business, and Abusing Trigger Leads, for factual information about this practice.

Why this practice adversely affects you

Once your credit is pulled and the trigger process gets started, trigger companies will strike while the iron is hot and immediately begin marketing to you – hard – because they know you’re looking for a mortgage. It will seem as if everyone has a “lower rate” than the next.

Don’t get me wrong. Competition is good, and it’s necessary for you as a consumer to shop around and get the best rate and loan package.

However, when you entertain multiple offers from various lenders it’s pretty easy to get a little off track with things. Many customers wind up with numbers for all kinds of loan scenarios.

In the end, you may spend time and money processing a loan application that may not save you the most money or even meet your original goals.

Since we help dozens of people every day who are in the process of shopping for a mortgage –and seeing the numbers they’re being quoted by other companies – we know how certain parameters are manipulated by competing companies to make their numbers appear better.

We came up with a 5-Point Plan When Shopping for a Mortgage to help ensure our customers are indeed getting the best deal out there – if that’s all they care about.

Of course there are other factors of equal or greater importance such as integrity, customer service and follow through which need consideration.

But if you want to just get jacked up about the numbers here’s how to go about it so you don’t get jacked in the end.

Rule #1: Know the exact amounts of your property taxes and insurance

If you plan to escrow your property taxes and insurance into your monthly payment, know before you shop how much those amounts are. If you allow companies to estimate these amounts for you, the payments and closing costs will be manipulated.

Rule #2: Allow each lender to pull your credit

Your mortgage rate is driven primarily by your credit score. All lenders rely on credit reports they pull themselves to price your loan. If you are trying to protect your credit by telling lenders you have your own credit report or know your credit score, the quotes you get with that are worthless.

Rule #3: Use the same home value with each lender

This is a biggie. Everything is based on the value of the home. To ensure lenders are providing you with sound numbers, you MUST use the same home value estimate with each one of them in order to compare.

Rule #4: Use the same loan amount with each lender

Same as home value, if you tell one lender you want to borrow $225,000 and another lender that you want $235,000, the $10,000 swing makes a huge difference in the rate you’ll be quoted.

Rule #5: Get all your quotes in writing

Any quote you receive over the phone is meaningless. The only quote that matters is the one you receive in writing – on the Good Faith Estimate (GFE).

The GFE is important for three reasons:

  • It’s required by law.
  • It gives you an estimate of your loan terms.
  • It lists your estimated settlement charges at closing.

Using GFEs from multiple lenders, you can then compare loans based on meaningful numbers including: home value, amount of loan, term, rate, and closing costs. If a lender delays giving you a GFE, go elsewhere.

No matter which lender you end up using, keep these guidelines in mind when shopping for a mortgage. And remember; always choose a company you feel comfortable doing business with.

Have questions about rates or loan products quoted by other lenders? Call our office at 877-878-0100.

We help people every day save money, pay off that junk debt, and find peace of mind. (Take a look at our Customer Reviews page for proof.)

Mortgage Rates Still Low Refinance Soon

Mortgage Rates Still Low Refinance Soon

Although they’re pretty low, mortgage rates aren’t at their lowest point again. They’re close, but not quite.

We hit the lowest point in early summer 2013. Then rates began to creep up slightly until they jumped at the end of the summer when Fed Chair Bernanke warned that the Fed might begin to taper their quantitative easing (pumping cash into the economy).

That day, we witnessed the largest single day rate increase we have ever seen – with rates jumping to 4.58%, the highest in two years. Although it was quite volatile, rates were still historically low compared to even a few years ago!

Janet Yellen nominated as new Fed chair

In September, after the Fed announced that they would, in fact, continue with quantitative easing, (NY Times: In Surprise, Fed Decides to Maintain Rate of Stimulus) rates began to decline again which is where we are now. We’re seeing lower rates compared to any other period of time except early this summer when they hit their lowest point.

On October 9, 2013, President Obama announced Janet Yellen as his nominee to replace Bernanke as the next Federal Reserve Chief. The general consensus is that this is good news for rates in the short term.

Based on her statements, Yellen will most likely continue the quantitative easing until the unemployment rate improves considerably. Of course, nothing is set in stone. Other economic indicators can throw all of this into flux. The markets are very unpredictable, especially with the current government shut-down and a looming debt ceiling crisis.

Considering a refi? Lock in Mortgage Rates now.

Currently we’re offering 30 year rates as low as 3.75% – with the low range between 3.75% and 4.25% depending on the loan program and qualifying factors.

Want to see at what rate you may qualify? Get a free instant rate quote: simply visit We’ve taken all the hassle from getting a quote – no waiting (and no pushy sales people) required!