How do you go about comparing mortgage lenders in Dallas, TX? When it comes to mortgage options, the Dallas area has more mortgage lenders to choose from than many other areas – which makes it confusing for Dallas area homeowners and homebuyers to determine how to get the best deal on their next purchase or home refinance.
When it comes to shopping for your next mortgage, be prepared to…
- Compare different mortgage programs such as FHA, Conventional, USDA, VA, and Jumbo mortgage programs.
- Compare Interest Rates Offered
- Compare Total Lender Fees for Associated Interest Rate Offered
- Compare APR
- Compare Lenders on the Same Day
Comparing Different Mortgage Programs –
This is important because different programs have different interest rates and fees charged. For example, FHA loans might have a lower rate, but because FHA charges up front mortgage insurance and monthly mortgage insurance, the overall cost of the loan might be more than a conventional mortgage program with a slightly higher interest rate.
Compare Interest Rates Offered –
Local Dallas mortgage lenders vary in their mortgage pricing for a variety of reasons. A small difference in mortgage rate can represent a large difference in overall interest over the life of the loan. Mortgage offices are businesses like any other, and depending on how the mortgage office is set up, it can impact the interest rate and pricing passed through to you the homeowner.
As an experienced Dallas mortgage loan officer, we’ve arranged the best possible mortgage office set up to give our clients to the lowest possible rates.
Compare Total Lender Fees Charged –
In addition to comparing interest rates, it’s equally critical to compare the total amount of lender fees being charged in association with the interest rate. Lender fees can vary widely from one mortgage lender to another. For the most part, there are fees charged by the lender for processing, underwriting, and closing the loan. However, some lenders do build in additional fees to pad their pocket and create additional profit margins – these fees are commonly referred to as “junk fees”. If the total lender fees exceed 1300, then you’re probably paying some “junk fees” or points.
As a comparison, clients that purchase or refinance with Josh Campbell can expect to pay less than $700 in total lender fees – ($300 for underwriting, $325 for processing, and 31.95 for courier and MERS fees). This is substantially lower than most Dallas area mortgage lenders charge.
Compare APR –
Many consumers are urged to compare APR when shopping lenders. Annual Percentage Rate (APR) is a way to compare the costs of a loan. Although it’s not perfect, it gives you a nice standard for comparing the percentage costs on different loans.
Loans can be confusing. Lenders can quote a lot of different numbers that mean different things. In an order to reduce confusion, the US Government passed the Truth in Lending Act. One of the provisions of this act is that lenders quote APR to potential borrowers. APR allows you to evaluate the cost of the loan in terms of a percentage. If your loan has a 10% rate, you’ll pay $10 per $100 you borrow annually. All other things being equal, you simply want the loan with the lowest APR.
Unfortunately, all other things are not equal. APR can include more than just the interest cost of a loan. On a mortgage, APR might include Private Mortgage Insurance, processing fees, and discount points. There are other fees and charges that may or may not be included in a given APR quote. Therefore, you need to look closely at each and every APR.
You can’t simply rely on an APR quote to evaluate a loan. You need to look at each and every charge and expense related to your prospective loan in order to judge whether or not you’re getting a good deal.
Compare Lenders on the Same Day –
Because mortgage rates fluctuate with the market, it’s crucial to ensure that you’re comparing lenders on an even playing field. Mortgage rates are based on the trading of mortgage backed securities. On any given day, mortgage pricing fluctuates based on the movement of the markets, so if you’re comparing rates from two different lenders on two different days, you could end up assuming that one lender had a better priced deal – when in reality, it might have just been an improvement in the market.
It’s important to work with an educated loan officer that can help you understand the market to ensure that you’re taking advantage of markets at the most opportune time.