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Almost half of all borrowers only consider one lender or broker before deciding where to apply for a mortgage loan.

Financing the purchase of a home is the most expensive loan you will ever enter into. Yet many borrowers take more time comparing the price of a TV then the multi-thousand loan to buy their new home.

Consumer Financial Protection Bureau “CFPB” is taking steps to help fix the mortgage market.   According to a recent CFPB study, “almost half of all borrowers seriously consider only a single lender or broker before deciding where to apply.” This article has some very valuable tools for mortgage loans: Guide to loan options, comparison of interest rates, guide to closing documents and closing checklist.

Consumer should compare interest rates between multiple lenders or brokers.

Former CFPB Director Richard  Cordray indicated that the rate calculator will offer more realistic rates for consumers for at least three reasons.  First, the calculator draws from morgage lenders’ own internal rate sheets so consumers will have access to the same information that lenders have about the consumers.  Second, it allows consumers to input a larger number of variables, including their credit scores, than other calculators.  Finally, the CFPB’s information is offered free from any agenda other than protecting consumers when they make mortgage decisions.

mortgage loan ratesConsumer should compare interest rates between multiple lenders or brokers.

The article cites the following example: “For example, our research showed that a borrower taking out a 30-year fixed rate conventional loan could get rates that vary by more than half a percent. Getting an interest rate of 4.0% instead of 4.5% translates into approximately $60 savings per month. Over the first five years, you would save about $3,500 in mortgage payments.

In addition, the lower interest rate means that you’d pay off an additional $1,400 in principal in the first five years, even while making lower payments.”

MUSINGS FROM DIANE:

Why would you spend more time comparison shopping for a cell phone then shopping for a 30 year mortgage?  Tell your realtor that you insist on shopping around for the best loan possible and never assume your lender or realtor is looking out for your best interests.

If you don’t stand up for yourself and be pro-active it will cost you thousands of dollars.  It may also result in a house you cannot afford and will eventually go into foreclosure.

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Diane L. Drain

Diane L. Drain, bankruptcy attorney, retired law professor, mentor and community spokesperson.

About Diane Drain:

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

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*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

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