How to Compare Mortgage Providers
The Federal Reserve advises home buyers to contact several lenders in order to compare rates, fees and customer service prior to entering into a home purchase. By comparing one lender to another, a buyer can often find the best value on a mortgage.
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Types
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There are three types of lenders a homebuyer can select: a mortgage broker, a mortgage banker or a loan officer. A mortgage broker and banker have the ability to shop a loan out to multiple banks and can provide several different sets of terms, conditions and interest rates whereas a loan officer works for one lender specifically.
Comparison
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When shopping for a mortgage provider, review and compare data. Items such as loan origination fees, closing cost fees, interest rates and points paid to a lender can be negotiable. However, the most important piece of data is the total amount of money that the loan will cost over time, and should be a large determining factor in selecting a mortgage provider.
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Considerations
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When shopping for a lender, a credit report does not need to be obtained in order for a buyer to receive a good faith estimate of costs and fees. Allowing more than one lender to obtain a copy of a credit report can lower a consumer's score, making them ineligible for certain loans or products. Only allow the lender you chose to work with throughout the process to obtain a credit report.
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References
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