One of the most disappointing experiences in my young career as a mortgage professional is when potential borrowers called me to let me know that they were going with the real estate agent's lender. Their exact words were "We liked you better but we got a better deal." The bad news came on the heels of me working til 12 AM the night before getting the loan documents ready to submit to underwriting the next day. It was a bitter pill to swallow.
Whether or not my potential borrowers did in fact get a "better deal" is highly unlikely. More often than not, borrowers end up with higher rates than what they were initially quoted. The stark reality of the mortgage business is that it's super competitive. However, with competition comes deceit and fraud. When you swim with sharks, the sharks call it "salesmanship" or "doing whatever it takes to get the deal."
When I meet with borrowers that I know are rate shopping, I challenge them to be more BS sensitive than RATE sensitive. I also tell my borrowers how to shop for a mortgage, following three simple rules:
- Shop on the same day. Rates change every day, sometimes during the day. So shopping on different days or different weeks is not very effective.
- Get a good faith estimate then compare only the 800 section. These fees are what lenders charge. The title fees, reserves, government recording fees, etc. are variable.
- Buy Tylenol or Advil. Shopping for a mortgage is a headache and if you choose poorly, expect your headache to get worse.
Last rule.... if a lender says "I can get you the best rate" or "I can beat my competitors rate", you should seriously consider another lender. As lenders, we all lend money from the same pool, so there's not much discrepancy in rate but a huge discrepancy in service. So shop wisely!
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