Courtesy of Bankrate.com, July 5th, 2012
Question: How can I tell who has the best deal on financing?
Answer: When comparison-shopping among lenders, remember that a lender can structure financing for a borrower several different ways. One lender can charge higher fees and offer a low interest rate while another may charge a slightly higher interest rate with lower fees. In order to make an ‘apples to apples’ comparison between lenders, ask each lender what their interest rate is for a zero discount point loan, based on a 30-or 60-day lock period. Then ask each lender what they charge for an origination fee, as well as any other fees they typically charge for a loan — i.e., broker, processing, underwriting. A reputable lender will not hesitate to answer these questions. If you get a “Good Faith Estimate” from a lender, which must be provided within three days after application, it will estimate all the charges that will be included in your loan. If you are comparing estimates from two lenders, check the charges in the 800 category and the 1300 category. Many of the fees charged by a lender are the same, no matter where you get your mortgage. These two categories, however, could tip the scales if you base your decision solely on price.
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