For some, shopping around for a mortgage can be intimidating. Between understanding how the financing process works and gathering multiple documents to, you may find yourself reluctant to meet with multiple lenders. But, this additional effort may help keep some extra dollars in your pocket. Here’s why you should shop for lenders.
Why You Should Shop
A common homebuyer misconception? The belief that the cost for a mortgage is the same across the board, which can lead buyers to snap up the first quote they receive. But not all mortgages are created equal.
According to a study by Freddie Mac, a mortgage shopper can save on average $1,435 over the course of a loan, just by obtaining one additional quote. Those who shopped around for five quotes found an average of $3,000 in savings.
And that’s not the only area of savings. When shopping around for lenders, you’ll notice that many have different fees. This includes borrower costs such as terms and loan origination fees. According to the same study, “By not shopping effectively, typical borrowers paid an extra $1,000 in broker fees charged to originate their mortgage.”
Be vocal and ask questions not only to fully understand the process, but to also get yourself the best possible deal. Often these fees are negotiable and worth inquiring about, especially if you have a competing quote. You’ll never know if you don’t ask!
What Should I Do?
With all that said, you’ll need to focus on the big picture of each quote. While one lender could have the lowest interest rate, they may have significantly higher closing costs and fees.
Take the time to do the math and figure out what’s best for you. Shop around for a lender early in your home search process. Searching for the perfect home can be overwhelming, but if you know your budget early on, you can focus your efforts at the right price point.
The Wolf Team
While we can’t completely rid you of your lender fears, we can certainly help making the home buying process easier. If you aren’t sure what lenders to turn to, we can help point you in the right direction. Give us a ring at 858-722-6847 or use our contact form.
-The Wolf Team