Clearwater Mortgage Blog

Part 2 - Comparing Loan Estimates From Different Lenders

December 23rd, 2019 3:51 PM by Carol Youmans

In part one of comparing loan estimates from different lenders, we covered quite a bit of data. If you didn't read that post - check it out here

When comparing loan estimates from different lenders make sure you're comparing the same

  1. Loan Amount
  2. Loan Term (30 years, 15 years)
  3. Type of Loan (conventional, VA, FHA)
  4. And - it's the best loan product for you

There's lots of information on a loan estimate, so make sure you're comparing the same items above. For example, you don't want to compare a

15-year conventional loan to a 30 year FHA loan. 

Next, it's also essential to get your loan estimates on the same day. That's because interest rates change every day - and sometimes more than once during the day.

So if you get a loan estimate on Monday from one lender and wait until Friday to get the second estimate, you're not comparing apples to apples. 

What a Loan Estimate Isn't

A loan estimate isn't an email from a loan originator saying something like:

"Hi John, we can get you a rate of 3% for 30 years. Let me know when you're ready to proceed."

That is not an estimate - it's a sales pitch. 

What to Compare on a Loan Estimate

So, if you’re comparing lenders here are the only fees to compare:

  • Loan amount
  • Interest Rate
  • Origination Charges
  • Application Fee
  • Underwriting Fee
  • Credit Fees

There might be some other fees from the lender like - "processing fees" so look for those. 

What Not to Compare on a Loan Estimate

There are fees on every estimate that the lender doesn't have any control over. These are:

Title Fees - these fees come from the title company the seller's real estate agent chose. The lender has no control over these fees. 

Property Taxes - these fees come from the county and will be the same no matter what lender you use. 

Homeowners insurance - you can shop for insurance. 

What the Most Important Part of a Loan Estimate?

Communication is an essential part of your mortgage.

That's right. You need excellent communication skills from the loan officer so that they hear what your objectives are and steer you to the right product for you.

As an example, do you really need a 30 year fixed if you are moving in 5-7 years?

Don’t just ask for a LE, ask for advice on what is best.

For instance, there are lenders that the broker can take you to where if you buy down the rate it might be very affordable.

It's challenging to get the same exact scenario priced from one lender to another, but make sure you trust the loan officer. Check reviews.

We hope this information about Loan Estimates was helpful. 

As always, the team at Clearwater Mortgage is here to help you. Call us today at 727-259-2900. 

Posted by Carol Youmans on December 23rd, 2019 3:51 PM