Home Buying in Frederick>Question Details

Jenn Moore, Home Buyer in Frederick, MD

I'm shopping around for the best rate on a 30-year fixed FHA loan. Do I have to apply for mortgages with multiple lenders to get accurate rates?

Asked by Jenn Moore, Frederick, MD Mon Jun 20, 2011

I've never shopped around for a mortgage before so I'm not really sure what I'm doing!

I've received cost scenarios from two lenders and one came in with a better interest rate than the other. Do I take the cheaper cost scenario to the other lender to try and negotiate a better price? Or do I have to apply for each loan first to get accurate rates and fees?

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The short answer is yes. Mortgage lenders must have 6 pieces of information in order to provide you with an accurate Good Faith Estimate and interest rate, which are:

1. Name
2. Address
3. Income
4. Social Security (THE BIG ONE)
5. Amount Sought
6. Estimated Value

If a mortgage lender provides an estimate of costs and/or an interest rate with any of the items missing, then it is presumed the lender does in fact have the information.

Interest rates are based in part on credit scores and credit history. That's why they need a mortgage application and pull your credit before they can give you an accurate GFE and interest rate.

Also bear in mind that interest rates change daily - sometimes as much as 3 - 4 times a day - or more! When you talk to one lender in the morning, the rates could have changed 5 times before you talk to another lender the following afternoon.

It's always best to compare rates and fees by contacting each lender in as short a time period as possible.
0 votes Thank Flag Link Mon Jun 20, 2011
Thank you for your advice everyone!
0 votes Thank Flag Link Tue Jun 21, 2011
Jenn,

to answer your last question, you are not bound to a particular lender when you apply. It is your right to shop to find the lender that you feel most comfortable working with. I would be more than happy to put together a closing cost estimate for your review, check out my blog for my contact info and my rate chart
Web Reference: http://www.joshburley.net
0 votes Thank Flag Link Tue Jun 21, 2011
My advice to you Jenn is to find a good agent to work with first. Ask him/her for their recommendations of reputable lenders in the area you should contact as well as asking friends and/or family members for recommendations as well. Having reputable people working for you is the best way to ensure you have a great buying experience! If you are not working with an agent alread and I can assist you in anyway, let me know! I work in the Frederick area!!

Best of luck!

Sharon Bremer
Long & Foster Realtors
301-676-4031
0 votes Thank Flag Link Mon Jun 20, 2011
Any lender who won't give you a rate quote without pulling credit you want to stay clear of. Once credit is pulled if the scores are lower than we based our quote on it could raise your rate but just to get a quote we can go by what you tell us.
If you'd like an estimate to compare to the others you've received let me know and I can email one to you.
0 votes Thank Flag Link Mon Jun 20, 2011
go to http://www.bankrate.com

Also, if Multiple Lenders run your credit within a 30 day period your credit gets dinged once.

Good luck.

Perry
0 votes Thank Flag Link Mon Jun 20, 2011
Thanks all! I was under the impression that the lenders will not give me a good faith estimate (GFE) that has the official rates and fees until I've applied and they've ran my credit, as Lew states below. I want to make sure that when I "apply" I'm not legally bound to one lender and can still compare the GFEs before I make my decision.
0 votes Thank Flag Link Mon Jun 20, 2011
I've notice some people telling you that you need to provide your social security # to get a rate quote. For your loan, this is 100% false. If you were applying for a conventional mortgage it may be true. But for an FHA insured mortgage, the rates will not vary if your credit score is above 640.
Web Reference: http://www.joshburley.net
0 votes Thank Flag Link Mon Jun 20, 2011
As Brent mentioned, FHA rates are pretty much the same across the board. If you know your credit score, a lender can provide you with an accurate closing cost estimate without pulling your credit. As long as the information that you provide is accurate, your rate quote will be as well. Please feel free to contact me with questions, or stop by my office that is right on Carroll Creek in downtown Frederick.

Josh Burley
240.397.7450 office
301.275.7596 cell
Web Reference: http://www.joshburley.net
0 votes Thank Flag Link Mon Jun 20, 2011
You should not let too many lenders pull your credit, as this could have a negative affect on your score. If you know what your credit scores are, you should be able to get VERY accurate quotes from various lenders. I work with Home Savings of America and we are a Federally Chartered Bank, been in business for over 76 years. We are able to lend and broker out to various different investors. This gives us a huge edge over competitors and most are only either brokers or lenders, not both like we are.

Give me a call or email me if you have further questions. I am here to help is any way I can.

I also live in Frederick MD, so, I am very familiar with your area!

Paul Deibler
Home Savings of America
443-343-0400 x 150
Web Reference: http://www.My-Hsoa.com
0 votes Thank Flag Link Mon Jun 20, 2011
Jenn,

Good luck and hope this helps. It really depends on the loan officer. Rates are all pretty much the same BUT they do differ from lender to lender. I think you need to make sure it's an honest comparison. Apples to apples as they say. VERY often they aren't a fair quote, like most of the net quotes you see. They can be very misleading and confusing. FHA is pretty straight forward as long as the lenders know your loan amount and credit score they should be able to quote you an accurate rate. Whether they will quote you and accurate rate and a realistic time frame is a different story. Is it with or without points etc? You can certainly take back to lender A what lender B gave you. You just have to know with whom you are dealing. One piece of advice I recommend is to google the loan officers name and see what comes up. And the lender as well. And use someone local in most cases. Lastly when they quote a rate ask them how long is the rate good. 15 days, 30 days, 45 days etc. When they send you a cost breakdown ask them if it's binding and ask them "is there anything else that I have to pay for this loan"? If they put you off or start talking in circles run away. I'm happy to compare as well if you like. My question is why FHA? Have they reviewed all options with you? Hope this helps let me know if you need more.
THANKS
0 votes Thank Flag Link Mon Jun 20, 2011
Dear Jenn,

Lenders vary in the loan programs they offer. You are always wise to consult with several lenders. At this point, it does not sound like you are making a mortgage application.

Be happy to share with you the lenders I recommend for my clients, most here in Frederick, or answer any questions if you are not signed with a buyer's agent.

Give me a call or drop me an email.

Peter
0 votes Thank Flag Link Mon Jun 20, 2011
Hi Jenn,

You should not have to make an application with multiple lenders. But you will want to know your credit score (tri-merge) and your income and expenses. If you provide a lender with accurate information they can provide you with a cost analyis. A government mandated form that outlines all of their fees. The lowest interest rate is not always the winner. And most certainly you can shop rates and present them to the lender you would like to work with to see if he/she will match that.
0 votes Thank Flag Link Mon Jun 20, 2011
No you don't....Tenacity is a brokerage firm and I am able to do all of the work for you...you really don't want to have a ton of people pulling your credit etc...please give me a call and we can discuss this further.

Hope to hear from you soon.

Christy Fear 301-474-4242 x1286
0 votes Thank Flag Link Mon Jun 20, 2011
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