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Best way to shop mortgage


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I've never shopped mortgages before so looking for some guidance.

 

We are building a new home set to close in October so I know I can use builder financing but there is no incentive. I've also worked with a broker for pre qualification so I know I have those but since we have till August/September I want to make sure I do all I can to secure the best loan.

 

Last time we were 1st time home buyers and had a great mortgage, no money down no PMI. We would qualify again for 1st time I think since we sold 3+ years ago but income may not make us qualify.

 

We are in Florida

 

340k home price, plan on 5% down conventional right now

 

700 score - trying to boost up but my understanding is unless I get to 720 700-719 is the same.

 

I know no pmi means a higher interest rate. Just hate seeing the 200+ addition for it.

 

My main concern is getting the lowest payment as possible. I expect to live in home at least 5 years but not forever home. 2nd most important is lowest closing costs. Due to market no builder incentive :-( I think my job may give a little bit with quicken loans

 

Thanks!

 

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Eta: I'm not even sure how many places to check. I'm thinking along with the 2 from pre qualified

BOA - our bank and where I had the good 1st loan

Local credit union- we are part of

Quicken - job lists in our offers page

Ally - have car loans and good relationship

Not sure I'm in the right thinking

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Posted (edited)

I generally start shopping at Zillow Mortgage Rates, because it's easy to get several apples-to-apples quotes.

 

Note that to get to apples-to-apples, unless something has changed recently, the pricing is for a 30-day lock...  and you need more like 120 (which may cost you money to secure, or you just risk the rate floating, as you are now anyway :) ). 

 

I don't know what ARM pricing is doing now, but if you don't plan to live there long-term, consider a 5/1, 7/1 or 10/1 if the cost savings is compelling.

 

4 hours ago, Leesa926 said:

2nd most important is lowest closing costs.

 

Please don't get hung up on this.  It's a dubious goal.  The last mortgage we did had the highest upfront costs of any places I checked, but the rate was phenomenal.  We made up for the difference with interest savings in just a couple of months.

 

To compare two offers you need to compare the total loan costs for the duration you plan to own the home.  This is the upfront lender fees (third-party fees shouldn't vary dramatically) plus the sum of the interest portion of the payments for the duration in question.

 

Don't use the full payment amount, because that includes the portion that goes to principal... that money is still yours, it's just in a different place [home equity instead of cash]).

 

 

Edited by cv91915
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