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FunnyDonut

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  1. Short Answer: It saves you a lot of money According to a recent research from Freddie Mac, the average borrower could save $1,500 just by getting one extra rate quote when applying for their mortgage. With five quotes, they could save $3,000 or more. Wow, so I should really do it. But how exactly should I do mortgage shopping? Preparation: Estimate your mortgage rate There is an old Chinese saying from The Art of War that “If you know your enemies and know yourself, you will not be imperiled in a hundred battles.” That’s exactly why this step matters. Having a rough idea of what interest rate you can expect is crucial for you to play well in this game. There are many factors that determined your interest rates including base rate (update daily), loan amount, location, LTV (loan to value ratio), credit score, house type (single family vs condo) etc. So to help yourself estimate, you can talk to your friends who have done mortgage recently and ask about their rates and how they get them. There are also some anonymous mortgage reporting site (such as rate.exposed) to get more data point. Keep in mind the best way to estimate your rates is comparing with people with similar cases. Now, let’s pick up the phone and start dialing You can follow the steps here: Call 5 lenders, ask them to quote and write the numbers down Find the best quote from the 5 lenders, let’s call it lender A Call the rest 4 lenders again asking them to match (or even beat) the quote from lender A. If you get a quote better than lender A, go back to step 2 and step 3 to call the rest to match Until the number can’t go lower and the rate is within your expectation. Extra Tip 1: Ask for special program Different lenders have different promotional program. For example, Wells Fargo has relationship discount where for every $250k asset you move to WF bank account, you get your rate reduced by 0.125%. You might just save yourself $10k but just a simple ask Extra Tip 2: Credit Hard Pull Many people are worried about hurting the credit scores by having too many lenders hard pull your credits. In fact, if you do them within a short period of time, multiple credit inquiries will combine to count as only one. Also, if you know your credit score in advance, you can simply just ask them not to pull and tell the lender the number. That should be more than enough for lenders to come up with a quote for you. Extra Tip 3: Pay attention to fees Some lenders do the trick to lower your interest by increasing some less obvious fees including closing costs, points, etc. So whenever you get a mortgage quote, always look at the full picture before making any decision.
  2. Would like to see your actual interest rate number before making any judgement. And it's normal to see ARM having lower rate than fixed because fixed rate has longer term and longer term means more risk, so I don't think that should be the reason for you to make the call. However, if you don't plan on being there for 7 years, that's a strong reason arm may make more sense to you as you will owe lenders lesser principle after 7 years. I would recommend you to shop around a little bit more to see if you can get a better rate. You might also find it useful to do mortgage calculation and estimate what's a reasonable rate for yourself by simply comparing with others who have similar situations. [Mod Note: We want you to be around a little longer before we allow outbound links in posts]
  3. Not sure if mortgage rate will keep going down but it's already at historical low so not a bad idea to refi now. And mortgage rate below 3.5% for 15 yr fixed is not uncommon lately so you may want to shop around to get a better rate.
  4. I have seen people reporting 30yr fixed rate below 3. Image at https://imgur.com/a/0e5JSLL
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