When you are in the market to buy a TV, for example, you first have to decide what features you would like the TV to have. Once you have determined these factors, you usually narrow it down to one particular TV that you are interested in purchasing. Let’s say you decide you want to buy the XYZ Super TV. In order to get the best deal on the XYZ Super TV, you are going to look at least three local stores in town that sell the XYZ Super TV. You wouldn’t walk into three stores, choose three very different TVs in each of the stores, and then make your decision on which one to buy. Why? Because you aren’t comparing apples to apples in a situation like that, and wouldn’t be able to accurately and fairly decide based on pricing alone.This same problem holds true when people are shopping for a mortgage. Probably one of the most frequent and damaging mistakes that mortgage shoppers make is not comparing apples to apples and oranges to oranges. When you approach a lender for the terms that you can obtain a mortgage, the lender will provide you upfront with a Good Faith Estimate (GFE) of your costs. The GFE will list out each cost line-by-line. It is extremely important that when you compare GFEs from different mortgage lenders that they contain the same information. For example, if one lender provides you with six costs of obtaining the mortgage and another lender only provides you with three of the costs, then the total cost is probably going to be lower on the one that only lists three of the costs.
It may be that the lender does not charge those other three costs or it may be that they just aren’t disclosing those other three fees to you.
If a lender provides you with a GFE that is missing costs that you see on another lender’s GFE, call the lender back and ask them to provide you the estimate of costs that are missing. By comparing the same line items on each GFE form is the only way to truly deduce which costs are actually lower. If you try to compare an apple to orange, you are going to walk away with a distorted picture of what you are actually walking away with.
Please call Mike at 317-437-5182 for the details.
If you have a mortgage that is at a 6.00% or higher interest rate it might be time for you to refinance. Please contact Mike for a free analysis. Most customers are saving over $100 per month by reducing their interest rates!
