With mortgage rates shifting once again, many homeowners and homebuyers are considering refinancing or purchasing a new home. But as Ben Lucero, owner of Indigo Mortgage in Albuquerque, explains that not all mortgage offers are created equal — even when the rates appear similar.
Why You Should Look Beyond the Rate
One of the biggest mistakes borrowers make when shopping for a mortgage is focusing solely on the interest rate without asking what it costs to get that rate. As Ben often says, “The lowest rate is only good if you know what you’re paying to get it.”
Lenders can quote an attractive rate, but if it comes with thousands of dollars in origination and discount fees, it may not be such a great deal after all. That’s why understanding these two specific fees is key when comparing loan offers.
What Are Origination and Discount Fees?
Origination fees are what the lender charges to process your mortgage. This is essentially the lender’s compensation for handling your loan application, underwriting, and closing.
Discount fees — or “discount points” — are optional fees a borrower pays to “buy down” the interest rate. One point typically equals 1% of the loan amount, and each point paid will lower the rate by a certain amount, depending on the market.
Here’s a tip Ben Lucero often gives borrowers: “Origination is what the lender earns. Discount points are what you’re prepaying in interest to get a lower rate. They’re very different fees, and they can add up quickly if you’re not paying attention.”
Together, origination and discount fees are the only lender-controlled costs that affect the rate you’re being offered. All other fees — such as title insurance, escrow, or taxes — are third-party costs and should be roughly the same no matter which lender you choose.
The Best Question You Can Ask Your Lender
Ben Lucero recommends that all borrowers ask one specific question when shopping for a mortgage:
“What is it costing me to get the rate you’re offering?”
More specifically, ask your lender:
- What are the origination fees?
- What are the discount fees?
If a lender is unwilling to clearly provide both figures, that’s a red flag. A reputable lender will be transparent from the start and explain exactly where your money is going.
A Real-Life Example from Indigo Mortgage
Ben shared a recent case where a borrower came to Indigo Mortgage to shop around for a better rate. Indigo Mortgage provided a full quote, including the rate and a breakdown of origination and discount fees.
The borrower then mentioned another lender offering a lower rate — which at first glance looked like a better deal. But once Ben reviewed the competing quote after the borrower had seen Indigo Mortgage’s numbers, it became clear that the lower rate came with thousands more in discount fees that the other lender hadn’t initially disclosed.
In the end, the borrower realized that the Indigo Mortgage offer, although slightly higher in rate, saved them money overall and came with no surprises.
Why Transparency Matters
Unlike many national lenders or online rate aggregators, Indigo Mortgage always sends its full offer first, without needing to see a competitor’s quote. That’s because, as Ben explains, “Our goal isn’t just to beat other lenders — it’s to earn the borrower’s trust by being honest and upfront.”
This commitment to transparency is why so many homeowners and homebuyers in New Mexico and Colorado continue to choose Indigo Mortgage. Ben and his team are mortgage brokers — which means they work for the borrower, not the bank. Their job is to find the best wholesale loan option that fits your needs and budget — not to sell you the one that earns them the highest commission.
Many borrowers don’t realize that brokers have access to a wide range of loan products from multiple lenders. That means they can often find a better fit than a single bank or online lender can offer — and they’re usually more willing to take the time to explain each part of the process.
Final Tips for Borrowers
If you’re shopping for a mortgage or thinking of refinancing, keep these steps in mind:
- Always ask for origination and discount fees.
- Don’t compare rates without comparing costs.
- Make sure you’re seeing the full quote — not just a teaser rate.
- Work with a trusted local broker like Indigo Mortgage who puts your interests first.
Have Questions? Talk to Indigo Mortgage
If you’re confused by mortgage quotes, want to know if you’re getting a fair deal, or just need help navigating your options, Ben Lucero and his team are happy to help.
Call Indigo Mortgage at (505) 836-5700
Whether you have questions about origination, forbearance, refinance opportunities, or general mortgage advice, Ben and the team at Indigo Mortgage are here to be your trusted local advocate.