This is a question I get often, usually in the beginning of the process – at what point do you shop around for mortgage rates to see which lender can give you the best interest rate on your mortgage?
The answer? When you have a contract or are close to one.
In the beginning, you’ll get pre-approved for a mortgage from a lender. Whether it’s one of your own or someone your agent recommends. They’ll have all of your paperwork and run your credit. They’ll be the ones who issue the pre-approval letter we’ll use to submit your offer. They usually give you an estimate upfront of a hypothetical property using average numbers to give you an idea, but until you have a specific property in mind, the numbers will vary.
Estimates vary on sale price, seller credit, property taxes, condo/hoa fees, and the length of time to close. Interest rates change daily, so what you’re quoted today, won’t necessarily be the same when you actually go to lock in your interest rate for closing.
That’s why it doesn’t make any sense to compare lenders and rates prior to contract time. Once you actually have those numbers to provide, you’ll be able to compare apples to apples. Then you can see who gives you the best rate and the best deal…this is where I generally say go with your gut. If you like a lender better, but another lender gives you a better rate – see if the one you like can match it. You’ll be getting the best of both worlds – the lender you like, with the rate you like!