Midway through 2022, the rising interest rates mean that the mortgage market volume is a fraction of what it was a year ago. That’s causing some lenders to chase profits, trying to keep their income high. That means borrowers looking for a home loan should really compare offers from several mortgage companies.
Because the mortgage market has many fewer home loans being processed, many lenders are chasing profits on the back of consumers. All lenders are not equal when offering a mortgage interest rate. It’s important to not only get the best interest rate available but more importantly, a homebuyer should know what it is costing for them to get that interest rate.
The most effective question to ask your lender is, “what is it costing me to get the rate you are offering”. More specifically, ask to see what origination and discount fees are being charged. Make sure to ask for both origination and discount fees! If you can get the lender to disclose those two fees, origination and discount, then you can easily compare offers.
Any costs outside of the origination and discount fees are going to be exactly the same for all lenders, because those will be title and escrow account charges. The company with the lowest interest rate may still mean you could pay much more over the life of the mortgage because of those fees.
Shop your mortgage around, ask for origination and discount fees so you can compare offers, and if you’re getting an offer from an online mortgage company, be sure to also include a local mortgage company.
Indigo Mortgage will never ask to see other lenders offers until we’ve sent you our offer, then afterward, we are happy to help you compare them. And shop with your trusted local mortgage company, Indigo Mortgage, serving New Mexico homebuyers for 20 years.