Continued from page 1
To compare loan products of
same type among different lenders:
1. Fix all lenders at one interest rate and lock-in period.
You have to compare different lenders on same rate (e.g. 7.5%) and lock-in period, otherwise you will be comparing apples and oranges. Most lenders can offer you a variety of rate and point combinations for same loan product and allow you to choose lock-in period.
2. Add up total lender fees for that rate including points and loan related fees.
There are a number of different fees paid in connection with loan, and some lenders have different names for them. One lender might offer to waive one fee and then add another one. So when comparing loans of different lenders you should look at total sum of ALL loan related fees. These fees can include processing and underwriting fee, mortgage insurance premium, appraisal fee, cost of a credit report, tax service fee, application, commitment, wire transfer fee, etc. Points can include discount and origination points and have to be converted into dollar amounts.
3. The lender that has lower lender fees has a cheaper loan than lender with higher fees. Example: For a loan amount of 100,000 on a 30 yr fixed rate mortgage, lender A is offering you a rate of 7.375% with 0 points, 7.25% with 0.5 points, and 7.125% with 1 points. He also charges $450 in loan related fees. Lender B offers you 7.25% on same loan with 0.375 points, 7.125% with 0.875 points, and 7% with 1.375 points and charges $680 in loan related fees. Both lenders are quoting rates on a 45 day lock.
#1 Loans USA (1LoansUSA.com) offers variety of mortgage information. Mortgage rates for any loan program from various lenders, mortgage rate predictions, bond rates, CD rates and more.
