Be wary if the settlement costs on a Good Faith Estimate (GFE) is significantly lower than others. Some unscrupulous loan officers purposely leave out some closing fees on their Good Faith Estimates to entice mortgage consumers.
There are two key things to look at when comparing mortgages:
1. Monthly payment. How much will you have to pay each month and for how long? Ultimately the rate you are paying matters less than whether or not it is something you can comfortably fit into your budget. Also make sure you understand the terms so you know how long you will be making that payment and if or when there may be adjustments to the amount you pay monthly.
2. Cost of the loan. What is the loan costing you in points and fees? Some loan officers pitch a really low rate but then hit you with a lot of upfront costs. If all other things are equal, then a loan with less costs will save you money.
While there are a number of other factors in determining which loan is best for you, these two factors should allow you to quickly narrow your search to a couple of brokers.
Never feel afraid to ask for the contact info to the Mortgage Broker's chosen Title Company to call and verify some of the fees, as well as asking for any documentation regarding what fees the Lender charges.
Keep in mind that if something seems too good to be true, it probably is. Many lenders will tell you exactly what you want to hear in the beginning and then, by the time you get to the closing table, your actual rate, terms and fees are completely different.
It's important to work with someone you trust, rather than whoever is saying they can give you the lowest rate.
Ask a trusted friend or family member to look over your offers and give you some advice. If you still have questions, be sure to ask your loan officer before you sign the final paperwork. Never sign for a loan that you don't fully understand.
When comparing loan offers its important they are for the same day. Interest rates rise and fall and whats available one day can change the next. Make sure you compare all offers generated on the same day to get a better view of whats being offered.
