Looking for a house? Shop mortgage rates online before speaking to a loan officer

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Buying your first home involves a seemingly endless number of steps, but learning how to get the best mortgage rate online is something you can easily tackle on your own. While some people may choose to work with a mortgage broker To find the best interest rate available, online rate research is another great option, especially if you have a relatively simple financial profile.

You’ve probably heard about how to get the best mortgage rate when shopping online, but you’re probably not sure where to find the best deals.

After talking to top mortgage experts, we’ve put together this list of everything you need to know to find the best mortgage rate online, plus some additional tips to make the process easier.

Here’s our quick and easy guide to finding the best mortgage rate online and becoming the smartest home buyer around.

What it means to shop for mortgage rates online

Like any other research that begins online, researching mortgage rates online is all about leveraging multiple resources and comparing your offers before making a decision.

“Online shopping rates are a quick and easy way to give you a rough idea of ​​the rates you’re entitled to,” said James Surrey, founder of Review home warranties. “The keyword here is ‘rough’, which means it’s a pretty wide range. While shopping online is a good place to start, it doesn’t provide a more detailed assessment of your eligibility. »

By entering basic information such as your name and credit score on third-party sites such as LendingTree, or even directly on lender sites, you can begin to learn what mortgage rates you can qualify for to get you on your way. of buying a house. This is useful for anyone who is in the early stages of looking for a mortgage, but as Surrey said, these online quotes don’t guarantee you’ll actually get the same mortgage when you finally apply.

The reasoning ? Apply for a mortgage is a more complex process that includes experts assessing your entire financial profile. They look at things like your income, your assets, as well as your outstanding debts, which tells lenders more about your debt to income ratio, i.e. how much debt you owe in relation to your income. Only after all of these things are taken into account can you be officially approved for a mortgage loan and this happens directly with a lender later in the process. There’s more to all of this than looking at the interest rate.

Who gets the most out of online shopping?

Now that you know a little more about starting your mortgage search online, let’s see who this strategy might be best for.

Buyers with good credit

Buying mortgage rates online will be much easier for buyers who have above average credit scores. If your credit score needs some TLCyou may be better off contacting mortgage brokers or lenders directly, as they will likely be able to help you find the best quotes faster.

“If you find yourself in a unique and atypical financial situation, for example if you are self-employed, if you buy a very particular house or if you have a bad credit score, online lenders will be less likely to be able to offer you a mortgage that fits your situation. needs,” said Scott Nelson, CEO of MoneyNerd.

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Buyers with typical finances

As Nelson said, the simpler your finances are, the easier it will be for you to find competitive mortgage rates online. Since many of these online mortgage rate tools use standard (and basic) information to calculate deals, they won’t be able to account for anything unusual, like if you have a lot of debt or if you need to borrow a jumbo loan. You may need to purchase private mortgage insurance, depending on your deposit.

It also won’t account for homebuyers who have less than 20% for a down payment. Most of these online tools assume buyers are in excellent financial condition, so if your finances include anything out of the ordinary, it may be best to contact a lender directly.

Buyers who want a standard mortgage

Much like buyers with good credit and those with typical finances, buyers looking for a standard 30-year fixed rate mortgage will also have an easier time finding rates online. Most of these online tools default to standard mortgage deals, which means you’re more likely to find a loan that’s right for you if that’s the type of mortgage you want.

How to Shop for Mortgage Rates Online

One of the best ways to start shopping for mortgage rates online is through a third-party site. Although you cannot borrow directly from these sites, they can provide an accurate overview of the best home loan deals available.

“Sites like NerdWallet and LendingTree provide free, intuitive-to-use mortgage calculators,” Surrey said. “Just enter basic information like your budget and credit score, and you’ll get a wealth of personalized information about the potential rates you qualify for.”

Once you’ve found a few great deals, it’s time to contact the lenders directly. It’s possible they beat you at this stage, but either way, it’s important to contact the lender directly to make sure you actually qualify for the rates originally offered. At this stage, you will likely need to provide more personal information such as proof of income, assets, and any outstanding debt. Armed with this information, your lender (or mortgage broker) should be able to tell you how close they can get you to that initial quote.

More insider tips

One way to ensure that information online is up-to-date is to check publication dates. “When you go to a mortgage rate comparison site, look for a date of publication,” Surrey said. “Mortgage providers change rates and policies frequently, so information outside of the provider’s official website can quickly become outdated. If you see a rate on a review or comparison site, visit the official mortgage site to verify the information.

Remember that your final offers will ultimately depend on your complete financial profile. “Be aware that the rates you see generally only apply to people with high credit scores, typically over 700,” Surrey said.

Nelson offered a similar note of caution. “Companies often promise fantastic rates up front, but don’t follow through once they see your credit score. Don’t be fooled by such offers or you will waste a lot of time,” he said.

The essential

Researching mortgage rates online is a great way to get started and understand the type of mortgage packages you might qualify for, but it’s important to remember that these initial quotes may not be the most accurate. Since applying for a mortgage is a more involved process with multiple steps to verify your financial information, you will need to contact lenders directly to get approval for the rates you find online.

But by starting your online mortgage search early, you’ll have a much better idea of ​​the types of loans (and interest rates) you can get — and be better prepared to fund those endeavors when you’re ready to go. forward with your mortgage.

Contributor Larissa Runkle specializes in finance, real estate and lifestyle. She is a regular contributor to The Penny Hoarder.

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