Contact several different lenders; it's helpful to know a few different loan officers. Different lenders also offer different types of loans. You want to explore your options in more detail. Ask questions to help you get a better idea of what type of loan might be the best option for you.
When it comes to deciding how many mortgage lenders to contact, there's no perfect number. Some experts recommend at least two or three options. In fact, filing with multiple lenders can save you hundreds and even thousands of dollars. Applying to multiple mortgage lenders allows you to compare rates and fees to find the best deal.
Having several offers available provides an advantage when negotiating with individual lenders. However, filing with too many lenders can result in a reduction in credit scores and can cause an avalanche of unwanted calls and requests. Applying to more than one mortgage lender means you can compare interest rates and fees to find the best deal. It puts you in a stronger position to negotiate and secure a better loan package if you have several offers available.
Getting a loan quote involves credit inquiries from any lender you work with. Will talking to multiple lenders lower your credit score more than just talking to one? Not necessarily. Founded in 1976, Bankrate has a long history of helping people make smart financial decisions. We've maintained this reputation for more than four decades by demystifying the financial decision-making process and giving people confidence in what actions to take next.
When you apply for a mortgage, you'll need to provide the lender with information about your work history, your income, and any assets and debts you have. Before you get quotes or apply for multiple loans, gather this documentation, including pay stubs and W-2 forms. Pre-approval letters are only valid for a short period of time, usually 60 to 90 days. Some are only valid for 30 or 45 days.
Keep this schedule in mind as you move through the process. However, credit rating models take into account the search for rates and group several queries into one if the inquiries are made over a 45-day period. These credit withdrawals usually stay on your credit report for two years before disappearing. Many online lenders, local banks and mortgage brokers display their rate tables transparently on their websites.
A housing counselor, a mortgage broker, and sometimes a lender will offer general suggestions to help you expand your search. A CFPB study shows that “interest rates can vary by more than half of one percent, or 50 basis points in mortgage jargon, for borrowers with similar ratings looking for similar types of mortgage loans. In addition, in the era of online mortgage brokers, prequalification and pre-approval borrowers now have more tools than ever to get the best rate, without necessarily having to file a formal mortgage application. Mortgage brokers have access to dozens of lenders, can make deals you can't even dream of, and they know much more intimately than you do about the latest changes in lending rules.
For some buyers, a conventional fixed-rate mortgage makes more sense, since it's the most common type of mortgage.