When shopping for interest rates, be sure that you are comparing the same loan programs. You should not ask one company for a quote on a 15 year fixed rate, while asking several others for 30 year fixed rate quotes. Also be sure that you are not being quoted an interest only loan, or a loan with a prepayment penalty attached. Ask for a copy of the Truth in Lending (TIL), to compare rate quotes. The TIL will show the terms of loan and make it easier to compare loan between several companies.
You should also try to do all of your rate shopping at one time; ates can fluctuate from day to day and even in the same day.
Smart mortgage shopping doesn't mean applying with 25 lenders. In fact, numerous inquires can hurt your score! Comparing quotes from two or three *honest* sources will give you a good idea of what rate, term, and payment to expect. How do you choose an honest broker? Ask your family and friends and don't be afraid to trust your instincts. Be particularly weary of quotes that seem to good to be true and always use caution when applying online.
When you are comparing multiple quotes be sure to compare the closing costs as well. Some lenders will quote you a very low rate, and charge you thousands in discount rates to get that rate. Since there are many factors involved in determining your interest rate, make sure that you are comparing apples to apples and take all factors into account.
When you are rate shopping don't just pay attention to the rates listed on websites and in the newspapers to make your decision as to who to who you decide to work with. The rates listed on websites and newspapers can be seriously outdated and not very accurate. The rates in the Sunday paper usually have to be provided early in the week in order to make it in the paper for Sunday and since rates change on a daily basis these rates may have changed considerably by the time you see them. On the internet there are many companies out there that do not change their rates on a daily or weekly basis so these rates can be seriously outdated as well.
When shopping for interest rates, you should keep in mind that a Good Faith Estimate has 4 Sections:
800 – Lender Fees / Appraisal Fees
900 – Interest / Insurance Premiums
1000 – Reserves / Escrows Deposited With Lender
1100 – Title Fees / Title Insurance
1200 – Government Fees / Recording Fees
Unless you are not escrowing (paying your taxes and insurance separately) all of these sections should have fees associated with them. If not, you are not getting a fair Good Faith Estimate.