With literally thousands of mortgage companies and banks on-line today, comparing interest rates can at times be very difficult. Information is not always fully disclosed or the manner in which it is presented can make finding the disclosed information very challenging.
Compare Apples to Apples
In order to compare apples to apples you need to make all companies aware of the same information:
- Purchase price
- Loan amount
- Type of property, i.e. single family, condo, townhouse, etc.
Once you have been given a rate based on the information you provided, you then need to be sure the following questions have been addressed:
- Are there any points?
- Are there any broker fees?
- Are there any origination fees?
- Are there any discount fees?
All of the above will be expressed as a percentage of the loan amount. These are very important questions, because zero points does not necessarily mean zero fees, as expressed as a percentage of the loan amount.
Beyond the fees expressed as a percentage of the loan amount, you should see very little difference in the closing costs. If there is a substantial difference you are probably not comparing apples to apples.
Most of the costs or fees that are incurred when purchasing or refinancing a home will be the same regardless of the lender you use. These are the fees charged by a party other than the mortgage broker or lender and will vary based on state and loan size. Regardless of whether or not they are disclosed to you, you will have to pay them unless you have made specific contractual agreements that circumvent these charges. The fees in question are as follows:
Title fees, which include search, examination, abstract, closing fees, endorsements, courier fees, document prep fees, attorney’s fees and title insurance
- Government recording and transfer fees
- Survey fees
- Appraisal fees
In addition to the closing costs, you may have pre-paid fees. These are not considered closing costs, but are due and payable at time of close. The fees include:
- Pre-paid interest
- Property tax escrows
- Insurance escrows
- Bank Fees
Bank fees will also very from lender to lender. But in most cases these fees will vary only slightly. Bank fee’s typically consists of:
- Underwriting fees
- Tax related service fees
- Processing fees
Getting all the facts up front will make for a smoother closing with no last minute surprises. Let the Sunshine Mortgage professionals guide you through the loan process and help you get the financing that is right for you.