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Shopping for Morgage

Hi everyone, I want to buy a house (first time) and have some questions about getting the loan: 1) When checking with a lenders, they quoted a rate based on 20/80 and exellent credit. So in a way, I won't know if or what I am qualify for until I accually apply, is that right? 2) When applying, I have to pay a fee. So to shop around, does that mean for each lender, I have to fork out that money? That seems wasteful to me. 3) Each time a lender pull my score, it goes down, if thats the case, shopping around seems bad. So to finallize, what do I need to do to avoid #2 and #3 from happening? And how do I compare each lender since each of them have different rates based on points and different application fees.
  • November 20 2011 - Houston
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Answers (2)

You are on the right track........  If you don't have a referral from a friend, co worker,etc that has had a recent successful experience with a loan officer, go to the Professionals tab top of this page. Look for a lender in your area/state, and make contact with several by email or phone. Let them know you are a first time home buyer and amount of down payment, approx. income, and if you would rate your credit as poor, fair, good, or excellent. Based on the responses and your confidence and comfort level, select one to Pre Approve you for a loan(s).  They will request actual income, and employment documentation with a Short Form application, and pull your credit report. You should receive a Loan Summary outlining interest rate, loan term/type, closing cost fees, and monthly payment break down. You should also receive a Pre Approval letter based on loan program selected. At this point the only fee that would apply would be a credit report fee of $25 or less.
When you find a property that interest you request a Loan Summary based on sales price, proposed closing date, seller paid closing cost, or other specific parameters. You can request other Loan Summaries from other lenders at that time to compare based on you providing credit score lender shared with you so other credit reports are not really necessary at this time. If you select another lender they will need to pull their own report.
Your last question is the most pertinent. Comparing "rates and points and different application fees" is only as important as the performance of the lender/loan officer. If all buyers had 20% down, excellent credit, great job history, and 60 days or more to close, any lender could close their loan and rate would not likely vary by .125%. In reality every buyer is unique, so find a loan officer with the experience and expertise to give you service that you can rely on....
  • November 20 2011
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1.) Yes, until the credit is pulled, there is a lot of guessing going on.

2.) You only have to pay for the credit report. Some Lenders may not make you, if they are trying to earn your business. Tell them what you've expressed here. The one's who are empathetic, may be the one's you want to work with.

3.) Your score will not go down each time a Mortgage report is pulled.

There is a place on the new Good Faith Estimate for side by side comparison.
  • November 20 2011
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