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FIRST ANSWER
Hi Lynnea,
Unfortunately, there is no easy answer to your question but understanding how mortgages are priced may lend some insight. There are two major costs to a mortgage and one additional major consideration. One, the interest rate. Two, the closing costs. So, a lender offering the lowest interest rate will likely have more closing costs and vice-versa. The third major consideration when shopping for a mortgage is value. What level of service am I getting? Will my broker or loan officer consider several different lenders in order to find me the best deal or will my lender simply try to "squeeze" me in to their loan program? Right now I'd say about half of my loans that are closing started somewhere else and did not get approved. (Generally at a local credit union or mortgage company with limited lenders and a limited product line). Unfortunately, todays money markets are very volatile, credit risk is an issue, job risk is an issue and lenders are changing their guidelines daily and their interest rates hourly (or more).
I can tell you that if you have perfect credit, a low loan-to-value, are not self-employed and do not have high debt-to-income you can still pretty much count on these closing costs. Attorney fee (depends on who you use but mine is $595). Appraisal (thanks to new HVCC rules) $350-600. Title Insurance (.00175 x loan amount + $100 is our premium). Processing, underwriting and origination fees are also fees to consider that will vary depending upon government vs. conventional and many other factors.
If you wanted to simply compare two loans side by side purely by cost, compare the APR's. An APR is the interest rate plus all closing costs calculated into an APR (Annual Percentage Rate) for the purposes of comparing loans. However, keep in mind that this only compares cost and not who you are doing business with and whether or not your loan will ever close. If you choose to deal with someone who claims to be the least expensive but blows a rate lock and has to charge you a higher rate later to close because rates have changed or worse blows your closing date and you lose the house of your dreams, have you really saved money?
My industry is under heavy scrutiny and (for the most part) the weak links are gone. My company is accredited by the BBB and maintains a rating that fluctuates between "A" and "A+." Whoever you choose I would urge you to investigate the company they represent. We are licensed in 35 states, have zero unresolved complaints with the Better Business Bureau and are pretty proud of it.
My Branch Office is located right in Waterboro, ME and my website is http://www.DaleDoughty.com. There are some helpful articles there (especially if you are a first-time home buyer) and you can even apply for pre-approval online. If you need help finding a Realtor I have several reputable ones that I have worked with that I would be happy to introduce you to. Good Luck!
Mon Jun 15 2009, 19:10
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