Knowing how to compare good faith estimates from mortgage companies will help you make an educated decision when deciding which lender to use.
Lender Fees: You should start by comparing good faith estimates that are for the same rate. This will level the playing field and allow you to determine who has the best offer based on fees. The top section of the good faith estimate will have all of the fees from the lender. There are various fees so to make it easy concentrate on the total from each.
Title and Escrow Charges: These fees are not charged by your lender but they can be a determining factor to use a specific lender based on the rates they have negotiated for these services on your behalf. Some lenders will tell you that these fees are the same no matter who you choose. That just is not the case.
Different title and escrow companies have different rates. The difference in savings can come down to who your lender has chosen to work with. Some companies have negotiated rates that include the signing service as part of the fees which saves you up to $ 200 which is a typical fee for a notary.
When the third party fees are all coming from the same company lenders are able to negotiate better deals for their clients. When title, escrow, and notary are all coming from the same place the company is able to get a little more aggressive with each piece.
The total fees on your transaction should be your main concern. A lender that has gone the extra mile to deliver third party fees that are cheaper has you in mind.
Estimate Date: Check the date on the estimates you are receiving. The mortgage market is constantly changing with rates going up and down. If you compare one estimate from one company and another estimate from the second company and they are done on different days you cannot get an accurate gauge of who is more competitive.
Trust: You must ask yourself. “Has this company presented themselves in a way that I feel comfortable?” A good faith estimate is just an estimate and sometimes can change. You should work with a company that has a reputation for fair lending and honest accurate good faith estimates. Currently there are 8 Certified Upfront Mortgage Lenders in the country. This is a great place to start. These companies have been accredited with this certification based on their honest and upfront business practices and a strict set of loan presentation guidelines.
Good luck in your search! This is an important decision for your financial future. Make it a pleasant and beneficial one!
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