Admin

Shopping Mortgage Rates

By
Real Estate Broker/Owner with Morningside Homes, LLC 720-231-5200 DRE# ER300941
 

Nobel Prize recipient, Richard Thaler, in his research into seemingly irrational economic behaviors, "found that consumers generally search too little, get confused while evaluating complex alternatives, and are slow to switch from past choices, even if it costs them." "Why are consumers leaving money on the table?"

Based on this behavior, a borrower securing a mortgage might depend on their existing banking relationship or a single referral from a friend or agent rather than shopping multiple lenders.

When shopping for a lower mortgage rate, consider that not all lenders share the same business practices.  Some may lure unsuspecting borrowers to a rate, knowing full well that they cannot deliver on it.  After making a loan application and supplying information necessary for approval, they reveal that the rate is not available for "whatever" reason.

They're counting on the borrower wanting to get into the home because the closing date is near and they'll compromise by accepting the higher than quoted rate.

Shopping for a mortgage rate can result in savings because rates are set by individual lenders.  To get an apples-to-apples comparison, the terms of the mortgage being shopped should be consistent among the lender candidates.

Consumers can make additional savings by not only shopping for better rates but for better terms and fees, which can vary widely among lenders.

The amount of savings can be affected not only by the difference in rates, but the size of the mortgage and the length of time borrowers expect to keep it without refinancing or selling.

  • Advertised rates are generally for A++ borrowers and the determination is the lender's based on many factors.  It may be unlikely those rates are offered to you. 
  • A recommendation for the best lender from a friend or family member will not necessarily be the best for you.
  • Instead of accepting the first offer received, shop for at least three to five offers.
  • Your personal bank may be convenient but it may not offer you the best rate, terms, and fees.
  • Ask if there is room to negotiate the rate or fees.

Ask your real estate professional for recommendations of several trusted lenders for you to shop a rate, terms, and fees. 

Posted by

Buy or Sell with Patty Clark              Denver/Aurora Co. and surrounding areas 

Chris and Patty

Helping Families Move with Care

If you would like to be sent properties on a daily or weekly  basis just call or email me and let me know your wants and needs. A match will be made with a home you love and with monthly payments you can afford. I specialize in first time home buyers and sellers who are ready to downsize or move to a larger home as the family grows

Morningside Homes, LLC
patty@morningsidehomes.com
www.morningsidehomes.com
Cell: 720-231-5200                      
CRS,GRI,WCR,SFR,CNE, MRE

 

Comments(3)

Show All Comments Sort:
Richard Weeks
Dallas, TX
REALTOR®, Broker
Great information, thanks for sharing.  I hope you have a great day.
Apr 29, 2023 03:16 AM
Charles Ross - eXp Realty LLC
eXp Realty LLC Salina Group - Salina, KS
Love To Help People

Excellent information. Thank you for sharing. Have a wonderful day and a blessed weekend.

Apr 29, 2023 05:04 AM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning Patty. Want to find a better rate than your current quote? If you don't ask, the answer is always "no"! Enjoy your day.

Apr 29, 2023 05:53 AM