Shop Wisely for Interest Rates in Escondido

Shop wisely for Interest Rates in Escondido

Why you need to shop wisely for interest rates in San Diego.....

How do you shop for interest rates? Most likely when you shop for interest rates in San Diego, you will either talk with a Bank or with a Mortgage Broker. There are key differences between the two that you should be aware of when shopping for both the home loan and the interest rate.

Banks/Lenders

1. Consumers receive "retail" pricing (interest rates), usually .25 to .5 higher than a Broker can give you.

2. Closing costs between Banks and Brokers are about the same, except for the loan origination fee that the broker charges, however, some banks also charge an application fee.

3. All banks are different, and have select loan programs available. Therefore they may or may not have the loan program you need, such as FHA, VA, first time home buyer programs, etc. All banks have their own interest rates and their own qualifying criteria.

Mortgage Brokers

1. A broker should be approved with many lenders, and therefore have a wide variety of loan programs and interest rates to choose from.

2. A broker receives "wholesale" rates from the Bank which is typically .25 to .5% lower in interest rate.

3. A broker will charge you a loan origination fee (his paycheck). This fee can vary between 1-3% points. Some may offer a no fees/points loan, but be aware that they will give you a higher interest rate so they can get paid in the form of a rebate from the bank/lender.

4. All brokers are different and approved with different banks/lenders and therefore have access to different loan programs and interest rates.

Assume a $300,000 loan with a 30 year fixed interest rate. San Diego, you just saved $92/month.

Total savings over 30 years by getting a 1/2% lower interest rate.

It is wise to know how to shop for interest rates.